Telecom Italia appointed Aldo Minucci as its new chairman at its management board meeting on Thursday, filling a position that has been vacant since the resignation of former CEO and chairman Franco Bernabe last October.
Telecom Italia said it will implement "enhanced" controls on any dealings related to its Brazilian business as the company seeks to create a more independent approach to evaluating any potential sale of Tim Brasil.
The long-running Telecom Italia saga took on a further twist this week after rebel shareholder Marco Fossati reportedly redoubled his efforts to prevent a sale of Tim Brasil, which he regards as crucial for the future of the Italian incumbent.
Telefónica is planning to buy and then break up Tim Brasil together with local rivals América Móvil and Oi, according to a report in a report in Italian daily Il Sole 24 Ore. However, Telecom Italia issued a statement that it is "not aware of any offer for Tim Brasil" and reiterated that it regards its Brazilian unit as a strategic asset.
The current management of Telecom Italia is expected to learn its fate on Friday at a shareholder meeting called by minority shareholder Marco Fossati to vote on his proposal to remove the current board and appoint a new one.
Telefónica faces a difficult decision in Brazil after authorities there told the Spanish operator to sell assets in the country due to its growing influence over Telecom Italia, while a key shareholder in Telecom Italia said it opposed an enforced sale of TIM Brasil.
Telecom Italia said it agreed to sell its entire controlling stake in Telecom Argentina to the Fintech Group for a total price of $960 million (€712 million), confirming previous reports that it had received an offer from the investment company owned by Mexican financier David Martinez.
After months of disruption and speculation about its future strategy, Telecom Italia finally unveiled a new plan that will see the Italian operator invest €3.4 billion ($4.5 billion) in next-generation networks, cloud computing and LTE and raise funds of around €4 billion through the sale of its Argentina unit and other assets and the issue of up to €1.3 billion in mandatory convertible bonds.
Telefónica's CEO and Chairman Cesar Alierta gave assurances in Italy that he will avoid job cuts and maintain network investments at the struggling Italian operator as the Spanish group gradually increases control over Telecom Italia.
Moody's on Wednesday said it has downgraded Telecom Italia's credit ratings by one notch to Ba1 from Ba3, realising the fears of former CEO Franco Bernabe by classifying the Italian operator's bonds as "junk".