Bulletin: Credit Impact Of Telecom Italia's Structural Separation Plan Still Unclear

PARIS (S&P Global Ratings) July 12, 2022--S&P Global Ratings' base case for Telecom Italia SpA (TIM; BB-/Negative/B) continues to focus on the current integrated group and does not factor in TIM's strategic plan to separate its activities into a ServiceCo, on which it would refocus, and a NetCo, to be disposed of, with proceeds to be used to reduce debt at the ServiceCo. The group recently detailed its draft separation plan at its Capital Market Day event, including financial details for each entity and preliminary guidance on ServiceCo's debt. We understand that, at this stage, the plan remains tentative, and TIM continues to explore options for the carveout of NetCo. If such a plan goes ahead, TIM's final capital structure

...PARIS (S&P Global Ratings) July 12, 2022--S&P Global Ratings' base case for Telecom Italia SpA (TIM; ##-/Negative/B) continues to focus on the current integrated group and does not factor in TIM's strategic plan to separate its activities into a ServiceCo, on which it would refocus, and a NetCo, to be disposed of, with proceeds to be used to reduce debt at the ServiceCo. The group recently detailed its draft separation plan at its Capital Market Day event, including financial details for each entity and preliminary guidance on ServiceCo's debt. We understand that, at this stage, the plan remains tentative, and TIM continues to explore options for the carveout of NetCo. If such a plan goes ahead, TIM's final capital structure will depend on the financial parameters of the NetCo separation (including asset valuation, use of proceeds, and full deconsolidation or sale of minority interests) and the eventual sale of other assets, for instance a minority stake in TIM's Enterprise business. What's...

Bulletin