Telecom Italia weighs sale of Brazil wireless unit- source

Reuters

MILAN, Oct 9 (Reuters) - Telecom Italia isconsidering a sale of its 67 percent stake in Brazilian mobilecarrier Tim Participacoes in a bid to reduce itsheavy debt, said a person familiar with the matter on Wednesday.

The debt-laden Italian operator, which was downgraded tojunk on Tuesday by Moody's credit rating agency, aims to garnerat least 9 billion euros from the sale, the person said.

The sale is one option being weighed by Telecom Italia's newChief Executive Marco Patuano, who is expected to present hisstrategy to the board on November 7. Analysts say Patuano mustfind a way to cut debt and turn around the faltering domesticmobile business.

No banks have yet been mandated on the potential deal, saidseveral sources involved in the sector.

Telefonica, which is Telecom Italia's biggestshareholder, is expected to back a sale of the Brazilian unit,said the sources. Telefonica is also present in the Brazil'smobile market, along with Mexico's America Movil, sowould potentially benefit from the move, analysts say.

A Telefonica spokesman declined to comment.

Telecom Italia shares closed up 6.2 percent to 0.66 euros.

Telecom Italia could not immediately be reached for comment.

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