Telecom Italia: Brazil 38% of Solpart transferred to Techold for 515 million usd

12/05/2007 - 08:44 PM

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BRAZIL: 38% OF SOLPART TRANSFERRED TO TECHOLD FOR 515 MILLION USD

 

SETTLEMENT AGREEMENT REACHED LAST JULY NOW FULLY IN FORCE, ENDS DISPUTES WITH BRAZILIAN PENSION FUNDS AND TELECOM BRASIL GROUP COMPANIES

POSITIVE IMPACT OF APPROXIMATELY 190 MILLION EURO ON TELECOM ITALIA GROUP NET PROFIT, AND A REDUCTION OF NET FINANCIAL DEBT BY APPROXIMATELY 350 MILLION EUROS

Brasilco S.r.l., the company held in trust by Credit Suisse exclusively on behalf of Telecom Italia International NV, today transferred its 38% equity interest in Solpart Participações S.A. (“Solpart”) to Techold Participações S.A. (“Techold”), an associate of Brasilco’s in Solpart, for a 515 million USD.

The transfer, foreseen in the sale agreements underwritten on 18 July 2007 by Brazilian pension funds Previ, Petros, Funcef and the Techold company, on the one hand, and Brasilco on the other, took place after Techold exercised its pre-emption right pursuant to the Solpart shareholders’ agreement, and following the approval of the Brazilian Telecommunications regulatory authority Anatel.

Payment will be simultaneous to the finalization of the operation and will impact 2007 results reducing the Telecom Italia Group net financial position by approximately 350 million euros and benefiting the Group’s net income of approximately 190 million euros, taking into account the positive effects of coverage against exchange rate risk.

In parallel, the settlement of disputes and arbitration proceedings between the Telecom Italia Group and pension funds and their subsidiaries with stakes in Brasil Telecom also comes into force, as agreed last 18 July. Under the terms of the settlement, all parties reciprocally drop any past or future claim associated with their respective equity interests in Brasil Telecom, or in any way deriving from the Solpart joint venture.