Telecom Italia asks for a credit line of 3 billion euros with state guarantee – sources

The Tim logo is seen at its headquarters in Rome, Italy November 22, 2021. REUTERS/Yara Nardi/File Photo

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  • TIM has started talks with UniCredit and three other banks
  • The Italian export insurer SACE could guarantee part of the amount

MILAN, April 21 (Reuters) – Telecom Italia (TIM) (TLIT.MI) has started talks with banks to raise around 3 billion euros ($3.3 billion) in funding which could be partially guaranteed by the Italian insurer SACE, three sources close to said the case.

Burdened by a total gross debt of more than 30 billion euros, TIM has about 3 billion euros of bonds maturing this year, according to the annual report.

TIM is discussing with UniCredit (CRDI.MI), BNP Paribas (BNPP.PA), Credit Agricole (CAGR.PA) and Santander (SAN.MC) an agreement to obtain a line of credit, the sources said. The banks involved did not comment.

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Under a guarantee scheme used by Italy during the first wave of COVID-19 in 2020 to help companies take on new debt, SACE is authorized to cover up to 80% of the financing.

However, there are doubts whether TIM is eligible to operate such a program, one of the sources said.

“A new line of credit of this amount, possibly backed by SACE, therefore structured with more favorable conditions, should be positive … because it would help Telecom Italia to increase its reserves and to meet more easily some of the extraordinary payments expected. over the current year,” Bestinver said in a report.

TIM faces a €1.7 billion payout by the end of September as part of the amount it put into the pot to secure frequencies in a fifth-generation mobile spectrum auction.

Hit by multiple rating downgrades after a record loss last year, TIM is scrambling to reorganize its business through an asset split after a failed $10.8bn buyout approach euros by the American fund KKR (KKR.N).

Under pressure for years due to fierce competition in its home market, TIM was forced to freeze 2021 dividends after posting an annual loss of 8.4 billion euros.

News of talks between TIM, SACE and banks over a possible €3 billion loan was first reported by Bloomberg News.

($1 = 0.9220 euros)

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Reporting by Elvira Pollina and Giuseppe Fonte, additional reporting by Stephen Jewkes; edited by Francesca Landini, Emelia Sithole-Matarise and David Evans

Our standards: The Thomson Reuters Trust Principles.

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