Italy plans rescue package for Open Fiber’s broadband expansion

Italy’s government is preparing measures to help state-backed telecommunications firm Open Fiber secure extra funds, shore up its finances and complete costly rollout programmes of fast-fiber broadband across the country, two sources briefed on the matter said.

The measures would ease Open Fiber’s bid to secure some 2 billion euros ($2.17 billion)in additional financing from its lenders and its own shareholders, the sources added.

Open Fiber was created in late 2015 to address Italy’s lags in upgrading the country’s broadband infrastructure to full fiber, especially in most remote areas of the country.

As soon as next month, the government could approve a decree to reshape fiber optic rollout plans included in a European Union funded post-pandemic recovery scheme, according to the people.

Prime Minister Giorgia Meloni’s administration is also considering measures to offset higher-than-expected costs, – which Open Fiber estimates in the region of 800 million euros – of laying down cables in the remote areas of Italy.

The state-backed firm is engaged in complex talks with a pool of over 30 Italian and international lenders to get additional funds on top of a 7.2 billion euros financing deal it is seeking to renegotiate.

State lender Cassa Depositi e Prestiti, which owns a 60% stake in Open Fiber and Australian fund Macquarie which holds the remainder 40%, are also expected to share the burden, injecting fresh capital to beef up the company’s finances.

Representatives of Open Fiber, its lenders and the company’s shareholders are meeting in Milan on Monday to take stock of the negotiations and assess further steps, according to two separate sources briefed with the matter.

Open Fiber’s network assets are expected to be combined with those of former phone monopoly Telecom Italia, which agreed to sell its fixed line network to U.S. fund KKR, a deal backed by the Italian government. Reuters