Telecom Italia chief Bernabe preparing to quit: report

Telecom Italia chief executive Franco Bernabe is planning on tendering his resignation at a board meeting scheduled for later this week, reports Bloomberg.

The boss of Italy’s biggest phone company has reportedly lost the support of Telco, the Telefonica-controlled consortium that holds a 22.4% stake in Telecom Italia (Milan, Italy), after clashing with shareholders over the operator’s strategy.

Telecom Italia chief executive Franco Bernabe is planning on tendering his resignation at a board meeting scheduled for later this week, reports Bloomberg.

The boss of Italy’s biggest phone company has reportedly lost the support of Telco, the Telefonica-controlled consortium that holds a 22.4% stake in Telecom Italia (Milan, Italy), after clashing with shareholders over the operator’s strategy.

Bernabe is apparently keen on reducing the operator’s $38 billion net debt through a capital increase of as much as €6 billion ($8.12 billion), while Telefonica (Madrid, Spain) would prefer to negotiate the sale of assets in Latin America as a means of relieving some of the financial pressure on the company.

However, Bernabe has argued that such a divestment would hurt the operator’s international profile and long-term interests.

Telefonica remains opposed to a capital increase and is set to become more influential after negotiating a $1.2 billion deal last week to gradually buy out its partners in Telco.

The deal will see Assicurazioni Generali (Trieste, Italy), Intesa Sanpaolo (Turin, Italy) and Mediobanca (Milan, Italy) gradually reduce their stakes from a total of 54% to 30% and give Telefonica the option of taking full ownership of Telco in 2014.

The Spanish operator is interested in selling Telecom Italia’s controlling stake in Tim Participacoes (Rio de Janeiro), Brazil’s second-biggest mobile phone company, and a source cited by Bloomberg claims the Brazilian regulator would likely welcome the sale of Tim to a foreign entity – keen, as it is, to preserve Brazil’s status as a four-player market.

With Telco unlikely to support Bernabe’s plans for a capital increase, Telecom Italia appears to be lining up a replacement, with Jean-Paul Fitoussi, an independent director, and Marco Patuano, the chief operating officer, identified as potential interim candidates.

Meanwhile, Telco’s preferred choice for a successor to Bernabe is thought to be Massimo Sarmi, the chief executive of Poste Italiane (Rome, Italy).