Fintech in Acquisition of Minority Stake in Telecom Argentina

October 29, 2014

Cleary Gottlieb represented Fintech in a series of agreements with Telecom Italia and certain of its affiliates pursuant to which Fintech will acquire all of the direct and indirect interest of Telecom Italia in Telecom Argentina. Fintech and Telcom Italia had previously entered into agreements with respect to the acquisition of Telecom Italia’s interests in Telecom Argentina for aggregate consideration of $960 million and recently entered into an amended set of agreements intended to extend the period of time in which Fintech can complete the transaction and provide various protections and accommodations to Telecom Italia in connection therewith.

An initial closing, in which Fintech acquired 17.0% of the shares of Sofora occurred on October 29, 2014. The acquisition of an additional 51.0% of the shares of Sofora from Telecom Italia remains subject to Argentine regulatory approval, which must be obtained within 30 months. If Fintech does not obtain regulatory approval, it has offered to guarantee to Telecom Italia a minimum purchase price in a third party sale of the 51% stake in Sofora for an additional 30 months and to provide collateral to secure such obligation.

Telecom Italia is Italy’s largest telecom operator and has been a participant in Telecom Argentina since its privatization in the 1990s. Telecom Argentina is one of the leading telecommunication companies in Argentina providing fixed and mobile telephony services and internet with more than 20 million customers and 15,000 employees. Common shares of Telecom Argentina are listed on the New York Stock Exchange.