Sara Bennewitz
MILANO — New wave of sales on Telecom Italy, which yesterday has lost 4.59% returning to 0.21 euros, after having reached a minimum of 0.20 (-10%). The slip was still accompanied by record volumes: 7.6% of the capital changed hands (and approximately 27% in three sessions). Consob has turned on a beacon to monitor the exchanges, but at the moment no particular irregularities have emerged. The strong volumes, in fact, would have been driven by algoritmi e high frequency trading: in practice purchase and sale operations that are triggered automatically according to particular parameters. Many of the investors hedges who had bet on the plan industrial presented on Thursday 7th liquidated their positions, but among the buyers there would also be some “opportunistic” funds, which focus on a change in strategy or balance at the meeting. On April 23rd, in addition to the 2023 budget, it will also be necessary to vote on the renewal of the board: the stock prices’ad Pietro Labriola and his list, after the debacle on the stock market they are at risk. However Labriola stay confident: to demonstrate this, yesterday he purchased others 500 thousand Tim shares at the price of 0.20 with an investment of approximately 100 thousand euros. Meanwhile, the management road show started yesterday and met with some investors in Rome to explain all the details of the “free to run” plan: it is a series of meetings that will end on Friday in Milan with an event organized by Mediobanca.
The new details of the 2024-2026 plan
Following the new extraordinary council held on Sunday, before the opening of the markets company clarified what analysts had already intuited last Thursday at the presentation of the plan: the debt at the end of the year after the sale of the network to KKR (which is expected to generate 14.2 billion) will drop to 7.5 billion (from 20.3 billion at the end of 2023, which pro forma without the network corresponds to 6.1 billion), to further reduce to 7 billion at the end of 2026when Tim expects net cash flows positive for 500 million. Before then the company will not be able to generate cash, because it will have to pay the financial costs of the operation, the debt charges, the minority share of the Brazilian dividend and bear the costs of encouraging staff redundancy.
No comments from strong members and the government
Although the new numbers were expected, yesterday the stock skidded because some expected more reassurances after the extraordinary board meeting. In these days of rollercoaster in the stock market, investors also remained surprised that, apart from the unions (who denounced the seriousness of the situation calling for government intervention), no politician or powerful partner (for example Vivendi which has 23.75% of Tim and CDP which owns 9.8%), ha felt the need to comment on management’s plan or actions. A deafening silence, unusual for the first Italian operator with 18 thousand employees. Analysts had also calculated that by reducing net debt by two thirds thanks to the network, Tim would also reduce the costs at the same time financial (1.74 billion at the end of 2023). AND however, interest on gross debt will remain high, estimated at around 800 million per year in 2025-2026. However, yesterday Tim was worth 4.59 billion on the stock market, less than its 66% in the listed subsidiary Tim Participacoes (5.5 billion euros), not to mention that the sale of Sparkle (750 million) and the price adjustments of KKR on the network (2.2 billion) could provide new resources with which to further reduce debts or distribute coupons. Finally, glanalysts expect the wedding between Fastweb and Vodafone Italia soon, and they wait to understand how this marriage will impact Tim. The lawyers and advisors (Ubs for Vodafone and Evercore for Swisscom) also worked over the weekend and the announcement is expected soon.