Telecom Italia's new logo for the TIM brand is seen on a building in Rome, Italy, April 9 2016. REUTERS/Alessandro Bianchi/File Photo
MILAN, Nov 11 (Reuters) – Telecom Italia (TIM) (TLIT.MI) CEO Luigi Gubitosi survived a boardroom showdown on Thursday at a meeting sought by top investor Vivendi (VIV.PA) following two profit warnings in three months at Italy's former phone monopoly.
Vivendi has called into question Gubitosi's role and sources close to the matter had said sparks could fly on Thursday.
TIM said its board had discussed the difficult market situation and the challenges facing the group, agreeing steps to prepare a new strategic plan due in February.
Discussions were tense, two people with knowledge of the matter said, adding Vivendi would continue to pressure the CEO to address the debt laden group's issues.
Vivendi was not immediately available to comment.
Having failed to stem a steady revenue decline in TIM's crowded domestic market, Gubitosi has outlined to the board plans to squeeze cash out of the group's assets, including its prized fixed-line grid that supplies services to millions of Italian households and businesses. read more
His proposals, aimed at bringing in new investors into TIM's assets under a spin off plan, failed to get Vivendi's backing at a meeting last month, people close to the matter have said.
The French media group wants to have a bigger say over the fate of TIM's network assets, deciding in agreement with the Italian government, according to the people.
TIM also said in Thursday's statement no negotiations were ongoing over its network or other strategic assets.
Vivendi holds 24% of TIM, an investment exposing it to a potential 1.8 billion euro capital loss at current market prices.
TIM's network assets are deemed strategic by the government, and Treasury-owned CDP has built a 9.8% stake in the group to oversee them and help counter Vivendi's influence.
Both the French group and CDP in March backed Gubitosi's reappointment and CDP is for now resisting Vivendi's efforts to question his position, sources have told Reuters. read more
Innovation Minister Vittorio Colao, a former Vodafone boss tasked by Prime Minister Mario Draghi with implementing plans to boost Italy's ultra-fast connections, is expected to play a key role in deciding the future of TIM and its CEO.
Colao has poured cold water on a project championed by the Treasury under Italy's previous government to merge TIM's fixed-line access network with that of state-backed rival Open Fiber.
Sources have said Gubitosi has been trying to revive the plan by convincing Vivendi that TIM should cede control of the merged entity, an option the French group has so far opposed.
Our Standards: The Thomson Reuters Trust Principles.
Subscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Information, analytics and exclusive news on financial markets – delivered in an intuitive desktop and mobile interface.
Access to real-time, reference, and non-real time data in the cloud to power your enterprise.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2021 Reuters. All rights reserved