The chief executive of Telecom Italia has admitted the company may not be able to avoid further credit downgrades, despite plans to raise up to 4 billion euros ($5.36 billion).
Shares in the company fell sharply on Friday – after failing to open at the start of trade – as the company revealed plans aimed at staving off downgrades on its debt.
But in an exclusive interview with CNBC, Telecom Italia CEO Marco Patuano said: "Rating agencies will evaluate our plans, but I'm not sure that they will keep us (at) investment grade. If they will not, what is really important is that we have a super solid liquidity in our hands."
The heavily indebted telecoms giant announced late Thursday that it would raise 1.3 billion euros in a convertible bond issue and sell its Argentine business after an unsolicited bid for the unit. It also wants to sell and lease back thousands of mobile towers it owns in Italy and Brazil.
Shares in company provisionally closed down 5.56 percent on Friday following the news.
(Read more: Telecoms industry in 'eat-or-be-eaten' mode)
The company hopes the restructuring will enable it to cuts its debt - 28.2 billion euros as of September 30 – and avoid other ratings agencies following Moody's, which cut its rating to junk last month.
Patuano said the measures would strengthen the financial position of the group, adding that it would not launch a rights issue next year.
"Well, we don't want to touch equity twice so we did what we consider right to do, and so I exclude a second rights issue in 2014," he said.
Patuano also reiterated that the company's Brazilian unit, TIM Brazil, as a "core asset."
This language surprised some analysts who expect the company to sell the division. Sources told Reuters that Telefonica - Telecom Italia's biggest shareholder – was aiming to sell the Brazilian business next year. TIM Brazil is the country's second-largest mobile operator – after Telefonica's own Brazilian unit, according to Reuters.
But Patuano did not rule out a sale, telling CNBC: "Brazil is core, it is a core asset,it is a part of our strategy…That does not mean a core asset has no price, but the price for a core asset is completely different from the price for a tactical asset. It's not for sale, I'm not facilitating a sale. If we receive an offer it has to be an offer for a core and strategic asset."
Robin Bienenstock, senior analyst at Alliance Bernstein, said the fall in share price on Friday was due to investor fears that the company would not sell its Brazil operations.
"But the reality is it would be mad to say anything other than exactly what they said – if you want to sell that (Brazilian) company well you're going to talk it up, " she told CNBC on Friday.
She added that Telecom Italia's restructuring plan should please a number of different parties - including Italian politicians.
"What yesterday's announcement did was it placated politicians – it said there is not going to be headcount cuts but there's going to be a lot of investment in the Italian market," she said. "It gave a little bit to the credit ratings agencies by saying we're going to do a mandatory convert, do some asset sales, and reduce debt."
Telecom Italia also released its third-quarter results - which met analyst expectations - Thursday. It reported a 27.4 percent fall in third-quarter profit to 505 million euros, compared to the same period last year.
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