Tim, with out the sale of the community the debt will rise | EUROtoday

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It's a brief blanket and the debt downside on Telecom's shoulders doesn't permit for shortcuts. The one which analysts hadn't actually considered, a lot in order to set off the avalanche of gross sales on the inventory trade that sank the share worth by virtually 24% on Thursday, was put in black and white with the crudeness of the figures within the addendum to the presentation of the plan that Tim ready over the weekend and launched at daybreak at this time, Monday 11 March.

In the present setup, Tim continues to burn money and debt continues to extend. If the switch of the community to Netco takes place by the summer season, in any case the present monetary yr will see the after-lease internet debt enhance to 7.5 billion in comparison with the 6.1 billion of the pro-forma with out community in 2023.

One of the 2 slides, added to the Capital market day presentation on March 7, supplies the connecting information. Financial costs are estimated for 2024 at 1.1 billion, of which 20% regarding Tim Brasil and 65% charged to the primary half of the yr. Costs of separation from the community and doable worth changes may impression one other 400 million, as would the absorption of abnormal working capital, whereas the absorption of extraordinary working capital may attain 700 million, to which add 200 million in money tax expenditure and 200 million for minorities by Tim Brasil. In all it’s 3 billion offset by 1.6 billion of Ebitda after lease anticipated in 2024, internet of funding spending, with internet debt which might subsequently go from 6.1 to 7.5 billion with leverage (internet debt after lease/Ebitda) round 2 occasions.

No money era in 2025

Cash era is just not but anticipated in 2025, which ought to as an alternative rise to 0.5 billion in 2026. However, the Tim press launch explains, money circulate ranges may rise to 0.4 billion in 2025 and 0.8 billion in 2026, if “normalized”. «The money circulate normalization elements – we learn within the notice – are related to extraordinary money outflows on the working capital degree primarily associated to the efficient liquidation of personnel topic to early retirement incentive initiatives already activated and to the normalization of prices of the debt as a result of impression of the anticipated enchancment on the score which can permit the corporate to implement, finally, a extra environment friendly administration of the liquidity margin and the discount of the fees associated to extraordinary gadgets”.

It should be underlined that the projections provided by Tim do not take into account the earnouts, additional payments relating to the transfer of the network to KKR, mainly connected to the creation of the “single community” with Open Fiber, and the doable switch of Sparkle. For the submarine cable firm that ensures worldwide connections, negotiations are nonetheless underway with the Treasury, which has provided a 100% valuation when it comes to enterprise worth (fairness plus debt) of as much as 750 million. However, Tim may preserve a minority share, persevering with to precise the administration of the corporate, with doable extra rewards on the value upon reaching/exceeding the targets set out within the industrial plan.