View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
September 30, 1997updated 03 Sep 2016 2:15pm


By CBR Staff Writer

Ing C Olivetti & Co SpA, Italy’s 23,000 employee information technology and telecommunications group, says it will turn its huge mid year losses into a profit by the end of 1997. But don’t be misled, the turnaround comes not from trading but from the sale of a near 50% share of the group’s highly profitable telecommunications businesses for $1.362bn (2,350 billion Lira). As announced earlier this month (CI No 3,241) Olivetti is to sell a 49.9% stake of its newly created holding company, Olivetti Mobile Telephony Services Holding BV, to Germany’s giant conglomerate Mannesmann AG. The holding company will take on Olivetti’s 66.7% stake in Infostrada (the fixed line operator) and Olivetti’s cellular operator Omnitel-Pronto Italia SpA. The first 25% will change hands by mid December this year, with the remaining 24.9% to follow before March 2000. The resulting extraordinary profits from the sale should see Olivetti into the black for fiscal year 1997. Interim figures for the six months to June 30 show losses of $193.9m compared to losses of $255.1m in 1996 on revenue that fell 9.8% to $1.809bn. This is despite one off gains in the half of nearly $80m, including $30m from the sale of its loss making personal computer unit in March to venture capitalist Piedmont International SA (for an estimated $190m); together with $22.3m from the one off disposal of real estate assets. But Olivetti insists that trading results are improving, with the period from July to August showing increases in revenue of 7% on a comparable basis. First half losses were attributed to what the company called a concentration of trading activities into higher growth areas. The interest charge for the period stands at $64m and Olivetti will use a substantial portion of the Mannesmann cash infusion to reduce the group’s gearing levels; Olivetti currently has outstanding debt of $652m versus a shareholders equity figure of $1.294bn. Further cash is to be raised from a huge combined share and bond issue which Mannesmann will underwrite as part of the purchase deal. Share capital is to be increased by 334.8 million shares, priced at $0.58 each (with a free warrant coupon attached) giving existing holders pre- emptive rights to buy 11 newly issued shares for every 80 shares already owned. The company will also issue an equivalent number and value of bonds, convertible into common stock on a one to one ratio exercisable up to August 2002, priced at par and with a coupon rate to be announced.

Content from our partners
Powering AI’s potential: turning promise into reality
Unlocking growth through hybrid cloud: 5 key takeaways
How businesses can safeguard themselves on the cyber frontline

Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.