Telecom Italia S.p.A.: Executed Agreements for the Sale of Interest in Telecom Argentina
November 14 2013 - 1:36AM
Italian Regulatory (Text)
PRESS RELEASE
TELECOM ITALIA Executed Agreements for the Sale of Interest in
Telecom Argentina
Milan, November 14, 2013 Pursuant to the mandate of its Board of
Directors, Telecom Italia has accepted during the night the offer
of Fintech Group for the acquisition of the entire controlling
interest of Telecom Italia Group in Telecom Argentina, held by it
and through its subsidiaries Telecom Italia International, Sofora
Telecomunicaciones, Nortel Inversora and Tierra Argentea, for an
aggregate consideration of USD 960 million. Of this amount, USD
859.5 million will be paid as consideration for the sale of: - 68%
of the voting shares in Sofora held by Telecom Italia and Telecom
Italia International, (USD 750.8 million); -15,533,834 Class B
shares of Telecom Argentina, representing 1.58% of the outstanding
shares, held by Tierra Argentea, (USD 61.2 million); - 2,351,752
American Depositary Shares, representing 117, 588 Preferred B
shares of Nortel, equal to 8% of the Preferred B shares held by
Tierra Argentea, (USD 47.5 million); The remaining USD 100.5
million will be paid pursuant to additional agreements related to
the transaction, including an agreement to continue providing the
Telecom Argentina companies technical support and other services
for up to three years, the waiver by Telecom Italia of certain
rights under, as well as amendments to, the current shareholders'
agreement relating to Telecom Argentina with the Werthein Group who
will retain 32% of the voting shares of Sofora, and commitment
Fintech to pay amounts already reserved for dividends by Telecom
Argentina, if such dividends are not declared and paid by the
Telecom Argentina Group prior to closing. Telecom Italia Group has
received certain guarantees of performance under the agreements,
including the pledge by Fintech of American Depository Shares
representing Preferred B shares of Nortel, in a number equivalent
to an initial average market value of USD 100 million. The sale of
the Class B shares of Telecom Argentina and the Nortel American
Depository Shares held by Tierra Argentea is expected to occur
before year end, whilst the sale of the Sofora shares is
conditional upon obtaining certain required regulatory approvals.
Fintech has represented its intention to launch, to the extent
required by applicable law and just prior to the closing of the
sale of the shares of Sofora, a tender offer for the publicly
traded shares of Nortel and Telecom Argentina that it will not
acquire as described above.
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Telecom Italia Group holds an economic interest of 22.72% in the
Business Unit Argentina, which reported revenues in 2012 of 22.1
billion Argentine Pesos (Euro 3.8 billion) with an Ebitda margin of
29.6%. In the first nine months of 2013, the Business Unit
Argentina reported revenues of 19.8 billion Argentine Pesos (Euro
2.9 billion) with an Ebitda margin of 27.9% and an Ebit margin of
12.4%. The net effect on the consolidated net financial debt on the
transaction closing date, is not expected to be material, assuming
constant exchange rates. Fintech has expressed the intention to
ensure the fulfillment of the investment plans of the Telecom
Argentina Group focused on the development of its
telecommunications infrastructure and the improvement of the
quality of services. Telecom Italia has agreed, in connection with
the sale, to provide continuing support to Telecom Argentina,
including its know-how in the innovation and technological
arena.
Telecom Italia Ufficio Stampa
+39 06 3688 2610 http://www.telecomitalia.com/media
Telecom Italia Investor Relations
+39 02 8595 4131 http://www.telecomitalia.com/investorrelations
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