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Welcome to the Merlyn and Kkr numbers festival

6 months ago babelfish

Welcome to the Merlyn and Kkr numbers festival

Tim, Kkr, Merlyn and more. Press review pills

HETEROGENESIS OF PURPOSES…

THE FACT TROUBLES ABOUT KKR

THE SUN LIGHTENS TIM

MERLYN DISTURBING THE MARKET ON TIM?

PAPOCCHI A CAPOCCHIA

BUT WHAT THE HELL DOES MERLYN COMMUNICATE ON TIM? WALSINGHAM'S LETTER

THE PURMS OF CONFINDUSTRIA

THE SUN SWALLOWS STATE CONTRIBUTIONS

POSTCARD FROM AMERICA

CHINESE SERIES

QUISQUILIE & PINZILLACCHERE

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WHAT DOES THE MERLYN FUND DO WITH TIM? EXTRACT FROM AN ARTICLE FROM SOLE 24 ORE:

The news went almost unnoticed by news agencies on Sunday. At 4.30 pm on 12 November the Adn-Kronos was released and a few minutes later also the Agi, the text being identical: «At the request of Consob, Merlyn Partners Scsp and Rn Capital Partners communicate that, as of 6 November 2023, jointly held, on their own or by proxy, a total of no. 3,231,657 ordinary shares of Telecom Italia Spa, equal to 0.021% of the ordinary capital and 0.015% of the share capital. As of today (November 12, Ed.) no changes have occurred with respect to this participation." At 10.41pm Ansa also relaunched the essence of the communication from Merlyn (attributable to Alessandro Barnaba) and RN Capital (attributable to Stefano Siragusa, former Tim top manager) which updated the shareholding in Telecom compared to what was communicated on 2 November, at the request of the telecommunications group, and released by news agencies on November 3: 200 thousand ordinary shares owned by Merlyn Advisors and 703,280 by Siragusa, assigned to him as stock options. A package equal to a total of 0.0056% of the ordinary capital.

What attracted the attention of Consob was the press release issued from London, on paper headed to Merlyn Advisors, on 3 November – the day of the start of the board marathon which led Tim to sign the transfer of the network to the US fund Kkr on 6 November – where expressed surprise at the "misleading reconstruction", specifying that " Merlyn reiterated to Tim that he had multiple securities dossiers, for a share of the capital less than 3%", and that "similarly only one securities dossier was disclosed to correctly demonstrate his being a shareholder." It was added that «RN Capital did the same and declared a securities dossier of Stefano Siragusa». Merlyn finally declared that "the sum of all its dossiers leads to a share of less than 3%" and that "it is not the company's task to verify the shares, but to listen to the shareholders".

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WHAT IS KKR UP TO ON THE TIM NETWORK? EXTRACT FROM AN ARTICLE FROM DAILY FACT:

In recent weeks the Court of Auditors, analyzing the decree authorizing the Treasury to enter into the operation, had explained that "the financial statements do not appear suitable to support the judgment of financial sustainability". However, something can be understood from the numbers communicated by Tim and the Americans. KKR values ​​the Tim network at 18.8 billion. Tim explains that, when everything is closed, he will have 14 billion less debt. Almost nine will come from bank debt contracted by KKR and which will be transferred entirely to the new network company. There remain 10, of which approximately 4 represent the real "cash" disbursement: of these, 2.5 should be provided by the Treasury, 1.7 by the Italian F2i fund, while it is not clear how much the sovereign fund of the United Arab Emirates which appeared as a financier at the event will invest. last moment (we're talking about over 1 billion). The rest? Therein lies the mystery, so to speak, even if it is not a mystery to financial observers.

The remaining part will be paid by KKR by "contributing" the stake it holds in Fibercop, the company where two years ago Tim led by Luigi Gubitosi transferred the secondary network (the last mile that goes from the street cupboards to the homes of Italians). Gubitosi was in desperate need of cash and, in exchange for 1.8 billion for 37.5% of the capital, he guaranteed a guaranteed return to Kkr plus an option to exit the investment, the details of which have never been disclosed (yes speaks of a return of 12%). The purchase of KKR valued the entire Fibercop at 4.7 billion two years ago, but today according to the US fund it is worth double that thanks to the investments made to bring fiber optics to the municipalities. Those planned by Fibercop amounted to 3 billion, but not all of them were carried out, even if funding from the Pnrr then took over. In any case, if this is the case, KKR's actual outlay to take 70% of the TIM network could fluctuate between 500 million and two billion, compared to a valuation of almost 19 billion. Furthermore, the fund will immediately obtain a super capital gain on its investment in Fibercop, which is perhaps the real reason that pushed them to carry out the entire network operation, and in a few years it will monetise everything by exiting NetCo. The Treasury, on the other hand, will enter at already inflated prices, risking having its share reduced, which was intended to be 20%. Not a big deal. Or at least, not like what Kkr does.

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WHAT WILL KKR DO? EXTRACT FROM AN ARTICLE FROM THE REPUBLIC:

In 5 or 6 years the Americans will resell the network with an IPO or something else, putting a restructured and profitable company on the market, which will only have the maintenance costs and rental income. However, the government will remain the majority shareholder, and will therefore retain control of the network, in addition to its golden power. He will collect his share of the capital gain, and will have the power of veto over who will take over from KKR , preventing the Chinese or other unwelcome suitors from appearing again. Italy in general will benefit from network innovation, which will finally allow the digital transformation to take place. In current conditions – this is the reasoning of those who followed the story – Tim had to use all his resources to repay the debt and could not make investments. By taking on this debt, KKR makes the company freer to use the cash flow to modernize the infrastructure. The expected figure is around 10 billion, to switch the network entirely from copper to optical fiber. A fundamental technological turning point for Italy, which would thus become a totally wired country, where digitalisation could really work. By purchasing the Kkr network it will not only take care of its debt, but will also pay Tim money that the company can use to reduce its own. The infrastructure will belong to the consortium which includes the American fund, the Italian government and others. The network is already rented to various operators, including Telecom. These proceeds, minus costs, will not be used to generate dividends, but to make the investments necessary to replace the copper parts with optical fiber. Once the operation is complete, the network will only need maintenance, and rentals will begin to generate profits. At that point, estimated between 5 and 6 years, Kkr will be released.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/benvenuti-al-festival-dei-numerini-di-merlyn-e-kkr/ on Tue, 14 Nov 2023 14:34:35 +0000.