KKR eyes further investment in Telecom Italia's fixed-line assets-sources

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Telecom Italia caller logo is seen astatine the headquarter successful Rozzano neighbourhood of Milan, Italy, May 25, 2016. REUTERS/Stefano Rellandini/File Photo

  • Top capitalist Vivendi piling unit connected TIM CEO Gubitosi
  • Gubitosi reviewing options for assets, talking to investors
  • KKR keen to summation much vulnerability to TIM's fixed-line assets
  • KKR wants bigger involvement successful FiberCop, merge it with Open Fiber

MILAN, Nov 5 (Reuters) - Private equity steadfast KKR (KKR.N) is eyeing a further concern successful Telecom Italia's fixed-line web arsenic Italy's main telecoms radical weighs options for its assets successful an effort to appease apical capitalist Vivendi, 3 sources adjacent to the substance said.

Vivendi (VIV.PA) is piling unit connected Telecom Italia (TIM) (TLIT.MI) Chief Executive Luigi Gubitosi aft TIM issued 2 nett warnings successful 3 months, cutting its escaped currency travel outlook and stoking concerns astir its 22 cardinal euros ($25.34 billion) successful nett debt.

KKR past twelvemonth paid 1.8 cardinal euros for a 37.5% involvement successful FiberCop, the portion holding TIM's last-mile web connecting thoroughfare cabinets to people's homes.

The sources said the capitalist would present similar to boost its vulnerability to TIM's fixed-line assets arsenic Italy prepares to walk billions of euros of European Union betterment funds to boost integer connectivity.

With a program to merge TIM's cardinal fixed-line assets - which tally from switching centres to households, including the FiberCop web - with those of state-backed rival Open Fiber connected hold, Gubitosi is reviewing different options to rise wealth from TIM's assets portion the institution wrestles with ferocious contention connected its location turf.

KKR is anxious to play a relation successful the plus revamp, expanding its involvement successful FiberCop and pushing for the merger with Open Fiber, the sources said, with 1 adding that KKR could adjacent put straight successful TIM, provided the authorities agreed.

KKR declined to comment. A spokesperson for TIM said the institution was not presently considering cutting its involvement successful FiberCop.

In caller months, Gubitosi has been trying to transportation Vivendi that relinquishing power of a merged FiberCop-Open Fiber entity was the lone mode to revive the unified-network program and flooded beardown governmental and regulatory absorption to it, sources person told Reuters.

Vivendi has truthful acold opposed TIM ceding control. A spokesperson for Vivendi said it had not been informed of KKR's involvement successful expanding its investment.

TIM's fixed-line assets are deemed strategical by the authorities and authorities capitalist CDP has taken a 9.8% involvement successful the institution to oversee them.

Another 1 of the sources said the authorities of Prime Minister Mario Draghi was informed of developments regarding TIM and KKR but was keeping astatine arm's length.

Gubitosi, whose program centres astir the instauration of a caller institution lodging TIM's assorted assets, has pledged to study backmost to the committee astir advancement connected the strategy aft speaking to investors.

($1 = 0.8683 euros)

Reporting by Valentina Za, Elvira Pollina successful Milan, Giuseppe Fonte successful Rome and Pamela Barbaglia successful London, further reporting by Agnieszka Flak; editing by Gavin Jones, Kirsten Donovan

Our Standards: The Thomson Reuters Trust Principles.

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