Milan- Shares in Telecom Italia (TI) bounced back on the Milan stock exchange Tuesday following comments from chairman Guido Rossi suggesting Italy’s telecommunication giant would not be selling its cash-generating mobile phone unit, Telecom Italia Mobile (TIM). TI shares lost 0.86 per cent on Monday but were up 1.38 per cent during early morning trading Tuesday.
In a meeting Monday, TI’s new CEO sought to reassure officials from Italy’s stock market regulator – Consob – about the economic and financial health of the company.
Rossi described TI’s 41.5 billion euros (52.8 billion dollars) debt mountain as “sustainable” and hinted that the sale of TIM was not in the offing.
“No change to the perimeter of activity of Telecom Italia is foreseen and… no mandates have been given to financial advisers, or consultants in general, for the disposal of assets,” TI said in a statement.
Under former CEO Marco Tronchetti Provera, TI’s board decided to split its fixed and mobile activities, prompting speculation that the company planned to sell TIM, possibly to a foreign buyer.
The alleged plan angered the Romano Prodi government and received a thumbs down from the financial markets, prompting Tronchetti Provera to resign.
A close advisor of Prodi was also forced to step down after government plans to rescue TI using public money were leaked to the press.
The case has caused serious embarrassment to Prodi’s four-month old government, with the prime minister due to address parliament over the issue on Thursday.
In a related development, Consob officials have told Milan prosecutors investigating TI that its September 11 decision to reorganize its fixed and mobile activities did not violate any laws.
Source- http://rawstory.com
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