Today the signature by the notary for the passage of the primary network of Tim to the American fund KKR. The network and 20 thousand employees thus pass FibercopTim’s secondary network company (of which KKR already holds 37.5%), which from today also absorbs the primary network.
The overall value of the transaction is 18.8 billion euros, which could rise up to 22 billion if certain conditions are met (earn outs), including the creation of the single network with Open Fiber (within 36 months).
The operation is of an epochal nature, because TIM is the only major European operator that deprives itself of the network, a fundamental asset for any TLC operator. No other former European incumbent, from Telefonica to BT (despite the separation of the network into Openreach), via DT and Orange, had ever deprived itself of its main asset. A bet, the one on Netco, which the market looks at with curiosity but not without some fear.
In all this, the dispute with the main shareholder of Tim, the French company, remains open Vivendi, which holds 23.75% of Tim and which turned to the Court contesting the ways in which the Board of Directors gave the green light to the sale of the network. But the operation is now irreversible.
Two-stage operation
There were several steps to get to the official birth of Netco. It begins, Ansa recalls, with the completion of the operation between Tim and KKR. After the transfer of the assets (the fixed access network, the national and regional transport network, the radio links, the passive infrastructures, the switching systems, the technological systems) to Fibercop, Kkr, which today controls 37.5 of them % of the secondary network, will acquire the shares of Fastweb (4.5%) and Tim (58%) through a specially created vehicle, Optics Bidco.
In addition to the primary network, the entirety of Telenergia is transferred to Fibercop. The primary network branch includes, in particular, the fiber and copper network and management activities; properties owned or rented for carrying out the business; the entire Teleenergia; debts and liabilities inherent to the primary branch; employee contracts, together with liabilities, obligations and commitments; the equipment as well as start-up. Subsequently, the so-called Fibercop Post Assignment was transferred to Optics Bidco, KKR’s vehicle for the acquisition of the entire Tim network.
The second appointment of the day is the FiberCop assembly for the nomination of the new board.
The composition sees Massimo Sarmi confirmed president; Luigi Ferrariswho left the baton in Fs to Stefano Donnarumma, will be co-opted as CEO and Elisabetta Romano should take on the role of chief technology officer.
Within Netco’s perimeter, there remain 20 thousand employees engaged in the network, which the Government and unions in their respective roles will certainly have to deal with in the next 5 years, before the KKR fund completes its work (for a limited time) and exits Netco to valorize its investment.
The other shareholders
On the issue, Kkr was also supported in the operation by other shareholders, starting from Mef and from the Italian fund F2iwhile from abroad they arrived the Canada Pension Plan and the Abu Dhabi Investment Authority.
Tim’s future
With the operation, Tim will significantly reduce the now unsustainable debt, which exceeded 32 billion gross, to reach 7.5 billion by the end of the year. In the coming years the telco will focus on the development of three different businesses: consumer, i.e. services for families and SMEs, Tim Enterprise, which deals with large companies and public administration, and Brazil.
Among the probable disposals to further reduce the debt, there is talk of Sparklefor which an offer from the tandem would be imminent in a short time Mef-Asterionand the sale of the remaining 3% held in INWIT.
Tim protagonist of consolidation according to the CEO Pietro Labriolawith two eligible partners identified by the market in Poste Mobile or Iliad. Hypotheses that still need to be verified, especially since the French do not seem to be inclined to play the role of prey. There are 18,000 employees left within Tim’s perimeter. The unions’ fear is that all the other direct competitor companies in the consumer sector of the new Tim, put together (Iliadmore WindTremore Fastwebplus Vodafone (editor’s note) do not give the number of the new company.
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