Infrastructure fund begins home-grown investment phase after government gives deal the green light
Italian infrastructure fund F2i announced it will invest €1 bn in Telecom Italia’s (TIM) Netco, joining Italy’s Ministry of Economy and Finance and US private investment firm Kohlberg Kravis Roberts & Co (KKR) as co-investors. Telecom Italia officially split off its domestic fixed infrastructure in November, although the up-to-€22 billion deal with KKR is opposed by Telecom Italia’s main shareholder, Vivendi, and others.
Last week, TIM secured the Italian Government’s approval for its plan to sell off its fixed network assets, with wholesale arm Sparkle still potentially to go through. Some strings were attached but have not been divulged. For its part, TIM seemed comfortable with them. In a statement it said: “These commitments were deemed by the government to be fully adequate to guarantee the protection of the strategic interests connected with the assets involved in the transaction.”
F2i said it had hit its funding target of F2i-Rete Digitale, Fund VI, aimed at investing in Netco, specifically through its Fund IV (Ania F2i Fund) and Fund V (Sustainable Infrastructure Fund). The €1 bn investment will gain it around 10% of Netco – the acquisition is expected to be finalised around mid-2024.
The company announced the funding target was hit in a very short space of time demonstrating there was a good appetite from investors including banking foundations, pension funds, insurance companies and family offices.
“We are very pleased to participate through our funds in a project of crucial importance for the country’s infrastructural progress and its digitalisation,” said F2i CEO Renato Ravanelli. “A modern digital network, which is set to catalyse major investments in the coming years, is key to improving citizens’ lives, business productivity and Italy’s competitiveness.”
“F2i once again confirms its role as a fundamental partner of the most important national infrastructure projects, being able to count on total funding of over €8bn,” he added.
The bigger list of investors suggests the Italian Government did push for more Italian ownership in the final deal. According to Corcom, the Cariplo Foundation has approved the investment in the F2i-Rete Digitale fund. The organisation, led by Giovanni Azzone will invest €35m, a similar amount to the San Paolo Foundation. Also in the new Netco fund is the Crt Foundation which gave the green light to a €15m investment and the Banco di Sardegna Foundation and CariLucca. CorCom said other foundations are preparing to invest.
Telco pedigree
Netco will not be F2i’s first telecom investment. In 2018 it acquired 60% of towerco EI Towers which manages around 2,500 broadcast, mobile and fixed wireless towers across the nation backed by more than 6000km of fibre network. Last week, Italian state broadcaster RAI announced plans to sell a stake of up to 15% in its broadcast towerco Rai Way. Howeverr a group of RAI shareholders have been agitating against a stake disposal and in favour of some form of merger with EI Towers to create more value.
In 2022, F2i sold its stake in fibreco, Irideos, to Spanish company Asterion Industrial Partners which said it would combine it with fibre services company Retelit to create “Italy’s largest alternative wholesale access and business-to-business connectivity provider.” F2i and EI Towers also acquired Persidera, an independent broadcast towerco. The company manages under concession three digital frequencies (multiplex) and offers television content transmission services in Italy for some major international media operators.