France Telecom has long been expected to exercise a put option to sell its 26.6% stake in loss-making Wind to Enel, as it tries to trim back its debt burden of 68bn euros ($74.6bn). Earlier this month, France Telecom reported a net loss of 20.7bn euros ($22.7bn), one of the largest ever losses in French corporate history.
This record loss was mainly due to a massive $20bn asset write-down, which included a 1.6bn euro ($1.7bn) write-down for Wind. This is a large drop in value for the Italian venture, from the 5bn euros ($5.31bn) that France Telecom’s ex -CEO and chairman Michel Bon thought he could raise by selling the stake a year ago.
Both companies have remained tip-lipped over a possible sale, although Wind shareholders are meeting next Thursday, and a decision could be announced soon after.
Wind holds about 15% of Italy’s mobile market, and 25% of its fixed-line market. However, it is currently under investigation by the European Commission, which has requested information from Italian authorities about possible state aid to Wind via Enel. It is thought that the aid could have been as much as 1.3bn euros ($1.38bn).
Enel is a state-controlled multi-utility company. Its chief executive, Paolo Scaroni, has reversed the diversification strategy of previous management, and is now trying to focus on its core power activities.
Source: Computerwire
