UPDATE 2-Telecom Italia to convert saving shares to raise cash

jueves 5 de noviembre de 2015 19:14 GYT

* Stock conversion will dilute investors, including Vivendi

* Conversion to be voted on in December

* Conversion could raise up to 573 mln euros cash (Adds 9-month earnings, paragraphs 10-11)

By Agnieszka Flak

MILAN, Nov 5 (Reuters) - Telecom Italia has decided to go ahead with a conversion of its more than six billion saving shares into ordinary stock to raise cash, in a move which would dilute the grip on the company of its two French investors.

Vincent Bollore's Vivendi has gradually built up a stake of just over 20 percent to become Telecom Italia's top shareholder, while tycoon Xavier Niel bought call options last month that could potentially turn him into its second-largest investor, raising questions about their ambitions for the indebted company.

Vivendi's stake could decrease to just under 14 percent if all saving shares are handed in, unless it buys new shares, Reuters calculations show. Vivendi had no comment.

Italy's biggest phone group said in a statement the conversion will simplify its capital structure, increase the free float of readily tradeable shares, boost liquidity and help pay for planned investments in fixed and mobile networks.

The company said it would give one ordinary share in exchange for each saving share voluntarily tendered, along with a 9.5 euro cents payment in cash. Stock not tendered would be converted under a mandatory scheme at a ratio of 0.87 ordinary shares for each saving share.   Continuación...