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NetCo includes TIM’s fixed network and related real-estate, but excludes TIM’s submarine cable unit Sparkle
Telecom Italia (TIM) has announced the implementation of its long-awaited NetCo, the business unit for its fixed line network, which was sold to KKR for €28.8 billion earlier this month.
According to a statement from TIM, the newly created division comprises over 20,000 staff members, 19,000 of which currently work in TIM’s Wholesale and Network departments and 900 from TIM’s staff functions.
NetCo will include all of TIM’s fixed line assets, including FiberCop, the company’s ‘last mile’ network in which KKR already holds a 37.5% stake.
TIM’s submarine cable unit, Sparkle, is not included in the deal and is subject to separate discussions between TIM and KKR.
As a result of the reorganisation, TIM will, as of December, employ around 17,500 people, including some 16,300 full time equivalents. The sale of NetCo will allow TIM to reduce its existing debt pile, which currently stands at €26 billion, by €14 billion.
Vivendi, TIM’s largest shareholder has emphasised its disappointment at the sale’s approval, adding that it is going to “use all legal means at its disposal” to refute the decision. The company argues that TIM’s assets are being undervalued, suggesting they are worth €30 billion, and are therefore being undervalued . Despite this, the deal is backed by the Italian government who took a 20% share in NetCo this year for €2.2 billion, seeing TIM’s network as critical national infrastructure.
The sale of NetCo to KKR is expected to close next summer.
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