Economy
Italy’s TIM enters into exclusive talks with KKR over grid sale
Telecom Italia (TIM) has granted U.S. fund KKR a period of exclusive negotiations for the sale of its landline grid, the Italian phone group said on Thursday.
TIM’s board unanimously mandated CEO Pietro Labriola to start talks with KKR aimed at obtaining a binding offer no later than Sept. 30, the group said in a statement.
KKR, whose bid could be worth around 23 billion euros ($25.19 billion) in total, prevailed over a consortium formed by Italian state lender Cassa Depositi e Prestiti (CDP) and Australian fund Macquarie.
A number of efforts have been made over the years to restructure TIM, Italy’s former national phone monopoly.
The U.S. fund has already invested 1.8 billion euros in the grid and had a bid to take the entire company private rejected last year.
It is now seeking to buy a unit comprising TIM’s entire domestic fixed access network and submarine cable business Sparkle.
A deal to sell the grid will need the approval of the Italian government, which can use a “golden powers” rule to set conditions or block bids for strategic assets such as TIM’s network.
To win Rome’s nod, KKR is open to Italy’s Treasury or other state-backed entities infrastructure fund F2i a co-shareholder in the network company, people familiar with the matter have said, adding the U.S. fund had concerns on teaming up with CDP due to antitrust issues.
The state lender and Macquarie jointly own TIM’s smaller rival Open Fiber.
For Rome, the priority is to secure a stake in the network so the government has oversight of the asset, a government official told Reuters on Thursday.
The network sale is a key plank of Chief Executive Pietro Labriola’s strategy to relaunch TIM by slashing the former phone monopoly’s 25 billion euro debt.
But Labriola’s plans have run into strong resistance from Telecom Italia’s top investor Vivendi, the French media group, which wants the landline grid – the company’s main asset – to fetch at least 31 billion euros in any sale.
With its 24% stake in TIM, Vivendi also wants any decision on the grid to go through an extraordinary shareholder vote, which would make it easier for it block a deal.
The exact value of KKR’s bid hinges on the terms of the contracts between the grid it will take over and TIM’s remaining business as well as some performance targets.
($1 = 0.9131 euros)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo
SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.
With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.
The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.
China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.
The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.
“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.
The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.
($1 = 7.1315 renminbi)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
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