Sawiris attempted to buy a 3 billion euro stake in Telecom Italia last year and has 1.2 percent through his Orascom TMT investments holding company. Now he only has one percent. Telefonica controls Telecom Italia via a 22.4 percent stake and wants to take full control of the outfit so that it can flog off the company’s lucrative Brazilian arm.
The deal led to the resignation of long standing executive chairman Franco Bernabe who had been seeking support for a capital increase of up to 5 billion euros to avoid a downgrade to junk and help fund badly needed investments in Italy. The company has nearly 29 billion euros of net debt and needs cash to replace its aging copper network.
It seems that Sawiris expects Telecom Italia shares to suffer after a credit downgrade soon.