Telecom Italia Plans to Propose Conversion of its Share

Published By : 06 Nov 2015 | Published By : QYRESEARCH

Telecom Italia has launched a proposal to dilute its existing shareholders. The move is considered to be aimed at guarding the Italian telecom giant after two billionaires from France occupied large stakes in it.

Till some time ago, Telecom Italia had a monopoly over the telecom market in Italy. The company has recently stated that its board has proposed a conversion of share. If this proposal gets approval, it would reduce the stake of Vivendi S.A., in the telecom service provider to a significant extent. 

At present, Vivendi, the France-based company operating in the mass media sector, is the largest stakeholder in Telecom Italia with 20% share. However, after this conversion, the French company will account for only 13% share in the Italian company. Even then the company would continue to be the largest stakeholder in Telecom Italia.

This conversion will also see the dilution of another stake, built up by Mr. Xavier Niel, the founder of Iliad, a French telecom operator. The only glitch in this operation is that it will require shareholder’s approval.

Currently, Telecom Italia is undergoing a series of changes. It has made significant changes in shareholder structure over the past few years but is still struggling to come up with a strategy that can stop the steady decline of this heavily indebted company.

Recently, the company has launched an investment plan of a multi-bn euro to contest the decline in its position, which was once dominant the telecom market in Italy. The company has invested €3.2 bn in the initial 9 months of 2016

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