Telecom Italia Reported to Be Looking to Exit Argentinian Market

Telecom Italia is reported to have hired advisors to help it sell its indirect stake in Telecom Argentina. The company owns a 50% stake in Sofora Telecomunicaciones, which in turn owns controlling interest in Telecom Argentina.

The La Nacion newspaper reported that two local companies have expressed an interest in buying the stake.

Telecom Italia has been in a battle to increase its holding in the company to take control, but has been thwarted by Werthein Group which is the other main shareholder in the company. Allegations have been made that the populist government has sided with the Werthein Group to block foreign investment. Telecom Italia has a put option on the Werthein Group which would force it to sell its stake in Sofora Telecomunicaciones to the Italian firm, but a legal ruling has delayed that sale.

The legal ruling comes from the fact that Spain's Telefonica owns a local mobile network - but also holds a stake in Telecom Italia. Although Telefonica claims that its eventual stake in the Argentine subsidiary is less than 2% and it has no representation in the management, the Argentine anti-monopoly commission ruled that the stake is illegal.

The Argentine government itself owns a 22.8% stake in Telecom Argentina following its take-over of private pension fund investments last year.

On the web: La Nacion

Posted to the site on 17th June 2009