Italian market regulator Consob has reportedly begun an investigation into Telecom Italia’s decision to sell its stake in Telecom Argentina. This report from Reuters comes barely days after the European telecom giant announced that it would sell its Argentina unit as part of a broader plan to free up cash and stave off a credit rating downgrade.
Telecom Italia did not say to whom it would sell the Argentina unit, but Reuters reports that the buyer is US-based investment fund Fintech.
The Italian operator has long planned to raise about $5.36 billion through asset and bond sales, as it wants to reduce its loans and bolster operation in Italy and Brazil. Telecom Italia is not however talking of selling its stake in Brazilian mobile phone operator TIM Participacoes, though there have been rumors of such sales in the recent past.
In a press release posted on its website, the phone company confirmed the sale of its stake in the Argentine unit.
“If a deal is struck, Fintech may have to sell its 40% stake in Cablevision, Argentina’s biggest cable television company, as local regulations limit cross holdings between telecoms and media firms,” says Reuters.
Small investors association ASATI is accusing Telefonica of forcing Telecom Italia to sell its stake in Latin America. The Spanish telecom giant, which is the largest shareholder in the Italian company, has not replied to such complaints.