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Tim, week of passion on the Stock Exchange

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Tim, week of passion on the Stock Exchange

Telecom still weak on the Stock Exchange

The stock has lost almost 10% in one week: the market fears that the sale of the network, essential according to analysts and industry experts which is the most important part of the CEO’s plan Peter Labriola approved last year, could enter a stalemate. In fact, the raises for the purchase of the network made by the two contenders, namely the Kkr fund which is already a shareholder of Fibercop and Cdp Macquire, of around 1 billion have certainly not met the expectations of the majority shareholder, with 23.9%. Vivendi.

Furthermore, there are also tensions over the leadership of CEO Labriola who, according to Vivendi, would have wasted time by not finding an adequate solution for the network. The improved offers will be discussed in an extraordinary board meeting on May 4th but it will be difficult to find a solution without the push of the government. Of course, with interest rates expected to undergo a further rise of 50 points at the next meeting of the ECB scheduled, this too, for May 4th, the alternatives to the sale of the network for Tim, given the 24 billion debt that weighs on his accounts, will have to be taken into consideration.

But what could they be?

On the one hand, a capital increase, which however appears unlikely, on the other the sale of Tim Brasil. The Brazilian subsidiary, according to analysts’ forecasts, should record an excellent first quarter with revenues of 1 billion (+25%) and EBITDA (gross margin) up 17%.

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Tim will report first quarter results on May 10

For Italy, analysts expect an improvement in the trend, even if it is not yet stable. Domestic revenues are seen down 2% to 2.5 billion euros, with mobile recording a more marked decline (-2.4%) compared to fixed (-1.9%) even if a rising Arpu is expected due to the effect of the tariff increases.

At group level, however, there should be an improvement in revenues to 3.8 billion, +5.4%, thanks to the increase in revenues from services and from Brazil. Equita reduced the target price for Telecom shares at 39 cents compared to the previous 41. Analysts value the network (NetCo) at 18.6 billion, Brazil at 6.3 billion and services (ServCo) at 9.4 billion. The problem, as already mentioned, is the debt and also the 7 billion maturing bonds which will have to be renegotiated at high rates which will, therefore, further weigh on the company’s accounts.

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