By RTT News, October 03, 2013, 05:59:00 PM EDT
(RTTNews.com) - Telecom Italia S.p.A. (TI, TIAOF.PK) Thursday named Marco Patuano as its chief executive officer, after the exit of Franco BernabÃ¨ who had simmering strategy-related differences with key shareholders.
Earlier today, BernabÃ¨ announced his exit at a board meeting that mulled ways to avert a severe credit-rating downgrade of the debt-burdened company.
BernabÃ¨ has been CEO of Telecom Italia since 2008, having had a short stint earlier in 1998. He has been chairman since 2011.
Meanwhile, Telecom Italia said it has started the process to elect a new chairman and in the meantime, Deputy Chairman Aldo Minucci will preside over the board.
The Board also approved the 6.6 million euros severance package for BernabÃ¨.
The exit of BernabÃ¨ follows a reported clash over strategy with key shareholders: Telefonica, Intesa, Generali and Mediobanca who through the investment vehicle, Telco, own a 22.4 percent stake in Telecom Italia.
Telefonica recently said it plans to raise its stake in Telco to 70 percent from 46 percent - something which BernabÃ¨ found unpalatable.
Bernabe was also under intense pressure to grapple with a possible junking of Telecom Italia's credit rating, given that the company has about 29 billion euros in debts.
On his part, incoming CEO Patuano is under pressure to chart out a strategic plan that could include divestments that will help cut debts. This will be in sharp contrast to BernabÃ¨ who was against divestments and had, instead, sought support for an ambitious 5 billion euros share issue.
In August, the company warned of weaker-than-expected profit owing to intense competition as well as the economic quagmire in Italy.
The company also had a setback, when in July, it ended talks with Hong Kong-based conglomerate Hutchison Whampoa Ltd. (HUWHY.PK, HUWHF.PK) over a possible merger of their mobile operations in Italy.
In Italy, the company's stock closed Thursday at 0.6440 euros, up 0.0105 euros or 1.66%, on a volume of 230 million shares.
On the New York Stock Exchange, the shares closed at $8.66, up $0.05 or 0.58%.
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