TIM Participacoes (Sao Paulo, Brazil), Brazil's second-largest wireless phone company, said on Tuesday its controlling shareholder Telecom Italia has no plans to sell part of its stake in the Brazilian company.
The statement from TIM Participacoes came in a securities filing responding to a report by newspaper Valor Economico that Telecom Italia (Rome, Italy) was preparing to sell some of its 67% stake in the local company, calling TIM Brazil, while retaining control.
TIM Brazil said it has contacting the controlling company and been told that "Telecom Italia does not plan to sell any part of its direct or indirect participation in TIM Brazil and is not even working on a proposal of that kind."
Speculation has mounted recently that some European companies could sell part of their stakes in Brazilian firms to raise cash for difficult times.
Portugal's Banco Espirito Santo, for example, announced in April that it would sell a 4.1% voting stake in Brazilian lender Banco Bradesco for around $1.2 billion.
Shakes of TIM Brazil were among the biggest decliners on the benchmark Bovespa stock index, losing 4.8% while the broader index fell 2.6%, tracking bourses lower on growing concerns about the euro zone's debt woes.
(Reporting by Brad Haynes; editing by Sofina Mirza-Reid)