TIM closes in on €3B in funding – report

It was first reported in April that Telecom Italia had started talks with banks to raise around €3 billion (US$3.1 billion) in partly state-backed financing.

According to a follow-up report from Reuters, the Italian operator has just cleared the first hurdle toward getting its hands on this handy pile of cash.

Quoting unidentified sources, the news agency said TIM secured a green light from credit export agency SACE on state guarantees underpinning the €3 billion credit line. The matter is apparently now in the hands of Italy's economy ministry, which would need to sign off on a decree authorizing the commitment.

Figure 1: Export agency SACE is said to have given the go ahead on a state guarantee for TIM's funding.
(Source: M4OS Photos/Alamy Stock Photo)

Reuters previously said TIM was talking to UniCredit, BNP Paribas, Credit Agricole and Santander over a deal to secure a credit line. The talks with SACE were to secure guarantees for up to 80% of the funding. Recent reports suggest that the banks had pre-approved the financing for TIM subject to state guarantees.

Staying afloat

TIM certainly needs funding to prop up its business while CEO Pietro Labriola works on a turnaround plan.

More should be revealed about this plan on July 7 at TIM's capital markets day. In the meantime, the operator is fighting to keep its head above water in the highly competitive domestic market.

Want to know more? Sign up to get our dedicated newsletters direct to your inbox.

In Q1 2022, TIM posted a net loss of €204 million ($212.5 million) at parent group level, while domestic sales, which account for about 80% of group revenue, fell 7.7% to €2.85 billion ($2.96 billion). Group service revenues fell by 2.5% to €3.4 billion ($3.6 billion).

The operator remains burdened by debt, meanwhile. At the end of March 2022, the net financial debt stood at €22.6 billion ($23.9 billion), up a further €1.5 billion ($1.58 billion) year-on-year.

Related posts:

— Anne Morris, contributing editor, special to Light Reading