Brazilian phone company TIM Participacoes SA is not up for sale, its chief executive told a local newspaper, denying reports that Telecom Italia SpA wants to sell its 67 percent stake.
A sale of Brazil's No. 2 wireless company is one option being considered by Telecom Italia's (Milan, Italy) new chief executive, Marco Patuano, a person familiar with the matter told Reuters last week. Patuano is under pressure from Telecom Italia's top shareholder, Spanish group Telefonica SA (Madrid, Spain), to cut debt through asset sales.
TIM's (Rio de Janeiro, Brazil) Chief Executive Rodrigo Abreu in an interview published on Monday reiterated comments made in a filing from Telecom Italia last Wednesday that no sale process has started.
"The controlling shareholder made it absolutely clear that there is no sale process of TIM Brazil ongoing, formally or informally," Abreu told Estado de S. Paulo. A spokeswoman for TIM confirmed the contents of the interview.
Abreu said for TIM's situation to change, Telefonica would need to get approval to buy more shares with voting rights in Telco, a holding company now controlled by Telefonica.
"Now, nothing changes. Any additional increase would need approval from Italian, Brazilian and Argentine authorities."
TIM competes directly with Telefonica in Brazil. Analysts say selling it or Telecom Argentina could help raise badly needed capital for Telecom Italia, a fix favored by Telefonica.
Abreu said TIM does not share Telecom Italia's high debt burden, pointing to the acquisitions of smaller telecom firms Intelig (Rio de Janeiro, Brazil) and AES Atimus (Rio de Janeiro, Brazil) to improve its infrastructure and offer fixed broadband services.
(Reporting by Caroline Stauffer; additional reporting by Brad Haynes; Editing by Theodore d'Afflisio)