MILAN, March 11 (Reuters) – Telecom Italia’s (TIM) (TLIT.MI), opens new tab pro-forma net debt following its planned landline network sale will rise to about 7.5 billion euros ($8.21 billion) by the end of 2024, the company said after a special board meeting to analyse a market rout of its shares.
Net cash flow is expected to be around zero in 2025 and about 500 million euros in 2026, the former phone monopoly said in a statement on Monday.
The details were issued after a meeting on Sunday, which addressed last week’s market rout following the presentation of its three-year strategy.
Debt has long been seen as one of the factors holding back TIM, along with tough competition in its home market.
Analysts had on Thursday pointed out that the forecast debt level of the venture emerging from the disposal of the company’s domestic fixed line network, which TIM expects to complete in the middle of this year, was above market expectations.
The group’s pro-forma net debt – after the sale of the grid – was at about 6.1 billion euros at the end of last year.
“The difference in the debt is mainly due to some ordinary operations, including EBITDA AL net of investments, financial expenses, net working capital (NWC) performance, TIM Brasil minorities and the tax and other charges,” TIM said.
Debt will also be affected by the sale of TIM’s domestic fixed line network such as separation costs, impact of potential price adjustment and additional items related to net working capital, it added.
