Telecom Italia Sells Milan Headquarters for $103 Million

Apr 01, 2014 3:25 am ET

(Updates with today’s trading in fifth paragraph.)

April 1 (Bloomberg) -- Telecom Italia SpA, the phone company seeking to trim its debt pile of $37 billion, sold its headquarters near Milan’s stock exchange and Piazza del Duomo, home to the city’s famous Gothic cathedral.

The six-story building located on via Negri 1 was sold to Fondo Inarcassa RE for 75 million euros ($103 million), Telecom Italia said yesterday. The carrier will remain a tenant of the building, which was renovated in 2007 and has gross floor space of 11,600 square meters (125,000 square feet).

Marco Patuano, in his first six months as chief executive officer, sold an Argentine business, put assets including wireless towers in Italy and Brazil up for sale, and scrapped a dividend to help restore finances at Italy’s biggest phone company. Telecom Italia’s net loss last year reached 674 million euros, taking the accumulated deficit in the past three years to more than 7 billion euros.

Telecom Italia joins a list of European technology and telecommunications companies that sold or tried to divest their headquarters. Nokia Oyj agreed in 2012 to sell its head office, a glass building overlooking the Baltic Sea in Espoo, Finland, for 170 million euros.

Shares of Telecom Italia fell 0.3 percent to 85.4 cents at 9:22 a.m. in Milan. They have jumped 20 percent this year, giving Telecom Italia a market value of 15.5 billion euros.

Last year, Telefonica SA, the biggest shareholder in Telecom Italia, tried to look for a buyer for its Madrid headquarters, a complex known as Distrito Telefonica that opened at the height of Spain’s property boom in 2008, people familiar with the matter said at the time.

The Milan building was earlier the headquarters of Stipel, the Piedmont and Lombardy phone carrier that started operations in 1925 and whose advisers included Giovanni Agnelli senior, principal shareholder in Fiat SpA. In 1964 Stipel joined SIP, Societa Italiana per l’Esercizio Telefonico, the former name of Telecom Italia.