- POSTED: 04 Oct 2013 00:48
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The chairman of struggling Telecom Italia resigned on Thursday, victim of a decision to allow Spain's Telefonica to increase its stake in the Italian flagship company.
MILAN: The chairman of struggling Telecom Italia resigned on Thursday, victim of a decision to allow Spain's Telefonica to increase its stake in the Italian flagship company.
In late September, Telecom Italia management revealed that Telefonica had raised its share in the Italian communication giant via a holding company.
But chairman Franco Bernabe was deeply critical of the transaction that also ruffled feathers in political and business circles worried that one of the country's leading companies was slipping into foreign ownership.
But with his views ignored, Bernabe submitted his resignation at a special board meeting organised to find a way to turn around the heavily indebted company.
Analysts and trade unions have serious doubts about the arrival of Spain's Telefonica. The main worry is that competition authorities will force Telecom Italia to unload profitable operations in South America.
And with Telefonica also buried with debts, investments on much need infrastructure in home market Italy will likely be limited, critics believe.
Telecom Italia employees voiced their opposition to the Spanish tie-up in front of the group's headquarters on Thursday, calling for the government to intervene.
Telefonica "is the worst possible partner", a union leader said, adding that the company "offers no strategic perspective".
Ratings agencies have made it clear in recent weeks that without a bold and convincing recovery programme, Telecom Italia's debt grade could be slashed to junk.