Telecom Italia rebel investor Marco Fossati opposes enforced sale of TIM Brasil

By VCPOST Staff Reporter

Dec 06, 2013 01:30 AM EST

Telecom Italia rebel investor Marco Fossati on Thursday said that he was opposed to the enforced sale of the company's Brazilian mobile business. Fossati argued that the exit would depress its multi-billion euro value. According to Reuters, Telecom Italia's 67% stake in TIM Paticipacoes (TIM Brasil) has become an issue since Telefonica agreed to takeover Telco in September. Telco is Telecom Italia's controlling shareholder group, while Spanish telecom company Telefonica is TIM Brasil's biggest rival. 

Brazil's antitrust watchdog ruled on Wednesday that Telefonica must therefore withdraw from its indirect and direct stake in TIM Brasil or seek a partner for Telefonica Brasil's Vivo business. Vivo is Brazil's largest mobile carrier, the report said. 

Brazil's regulatory decision accelerates a potential fight between Telefonica and other Telecom Italia shareholders over the future of TIM Brasil. TIM Brasil's market value exceeds USD11 billion, Reuters said. 

The report said that the two sides are divided on whether the Italian Group should exit TIM Brasil to help pay down EUR28 billion (USD38 billion) of net debt.

Aside from resulting to a poor valuation, Fossati says that an enforced sale of TIM Brasil for regulatory reasons would also remove Telecom Italia's main prospect for growth without solving its debt problems, Reuters reported. 

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