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Telecom Italia Holder Telco Agrees Capital Increase Of EUR600 Million

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ROME -(Dow Jones)- Telco, the holding company that owns 22.4% of Telecom Italia SpA (TI), said Thursday its board has agreed to a capital increase of EUR600 million, which will allow it to fund its leveraged ownership of the largest stake in Italy's largest telecommunications company.

Telco's owners are Telefonica SA (TEF), Assicurazioni Generali SpA (G.MI), Mediobanca SpA (MB.MI) and Intesa Sanpaolo SpA (ISP.MI).

Telco's board approved the nine-months accounts as of Jan. 31, acknowledging a EUR1.001 billion loss for the period, driven by an impairment charge of EUR901 million on its only asset, the Telecom Italia shares.

Telco also said it would issue a new bond of around EUR1.75 billion, to be subscribed pro rata by its shareholders.

Telco added it had a new banking facility of around EUR1.05 billion.

The recapitalization was necessary after Telecom Italia cut its 2011 dividend, which is Telco's income stream.

 

-By Christopher Emsden, Dow Jones Newswires; +39 06 6976 6920; chris.emsden@dowjones.com

 

(END) Dow Jones Newswires

May 03, 2012 12:48 ET (16:48 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

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