New Telecom Italia chief expects carrier's debt to drop by $4b

29 Sep 2006
00:00

(Associated Press via NewsEdge) Telecom Italia's new chairman said he expects the company's debt to fall by more than 3 billion euros ($4 billion).

Guido Rossi, briefing a parliamentary commission, also said that the company has no plan to sell assets.

Rossi, who was appointed earlier this month, insisted that Telecom Italia has enough liquidity to meet all deadlines on its debt until the end of 2007, and that no banks had ever questioned the sustainability of the company's debt.

Telecom Italia's debt level has come under scrutiny in recent days after the company's surprise announcement on September 11 that it plans a reorganization that could possibly lead to asset sales, implying that it wants to pay down its debt.

After his plan to split the cellular phone and fixed line divisions created waves with the government, then-chairman Marco Tronchetti Provera resigned his position.

'Telecom Italia year-end debt will fall to 38 billion euros ($48.2 billion),' Rossi told members of the transport commission in the Chamber of Deputies. 'Telecom has already shown it is able to reduce its debt,' the chairman contended.

Current debt was put at 41.3 billion euros ($52.38 billion).

Rossi not provide any details about how the company plans to reduce the debt.

© 2006 The Associated Press

© 2006 Dialog, a Thomson business. All rights reserved

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