Update : CEO of Telecom Italia SpA (ADR) (NYSE:TI) Bernabe Is Planning to Resign

After losing the support of the carrier’s biggest shareholders, Chief Executive Officer of Telecom Italia SpA (ADR) (NYSE:TI) Franco Bernabe is planning to resign in the next week. He has led the company since the end of 2007 and also remains as a chairman of company in 2011. When the company was acquired by Olivetti SpA, He was also CEO in that time from 1998 to 1999.

Bernabe, said that on meeting of Oct 3 he will present his resignation to the board. Spokesperson of Italia declined to comment about this issue, Poste Italiane SpA CEO Massimo Sarmi is  next  candidate for CEO. People with knowledge of this matter said that Bernabe lose the confidence of Telco SpA a group which owns 22.4% shares and company is not able to cut its debts quickly.  At the end of June, company reported more than $38 billion in net debt. Moody’s Investors Service said that this debt will decrease the company’s investment-grade rating.

Francisco Salvador, a strategist at FGA/MG Valores in Madrid said that Telecom Italia lost its track and it also lacks the dynamism that a telecom company needs. He also said that it’s time for others to take over it for industrial and strategic vision.

The biggest stakeholder in Telecom Italia SpA (ADR) (NYSE:TI), Telefonica SA (TEF), is agree to gradually buy out three financial investors’ holdings. The purpose of this move is to force Telecom Italia to sell its Brazilian business and to avoid an increase in cash through increase in capital.

Bernabe said selling assets in Latin America would hurt the company’s international image. So, He favored an increase in capital because there is a lot of liquidity opportunity in Latin America for this reason he is considering to present a proposal to board for the increase in capital of as total amount of ($8.1 billion).

Robin Bienenstock, an analyst at Sanford C. Bernstein & Co. said that The CEO interest is absolutely opposite to the interest of the shareholders.
The shares value decrease 2.6 percent to 58 euro cents yesterday in Milan. This year stock has lost 15 percent this year that is its ninth consecutive annual decline.

Under the Sept. 24 agreement, partners of Telefonica, Assicurazioni Generali SpA (G) Intesa Sanpaolo SpA (ISP) and Mediobanca SpA (MB) agreed to reduce their investments gradually from 54 percent to 30 percent. Next year, Telefonica has opportunity to fully take over Telco.