In testimony before the Italian parliament, Telecom Italia SpA CEO Franco Bernabe said that under his helm since 2007, he had steered the company to lower its overall debt pile by USD11 billion. What he did omit was telling the senators that in the same period, the share values of the Italian telecommunications firm fell by 73%, causing the company to lose EUR30 billion or USD40.6 billion in value.
Now, the market capitalization of the company is at a mere EUR10.6 billion, which is a third of its net debt. This had placed the company's debt pile to nearly junk status by Moody's Investors Service.
Now, with the current clash with Telecom Italia's largest investor group, Telco SpA may be the beginning of the end for the CEO. He is planning to tender his resignation during the company's meeting scheduled for October 3 and he is ready to step down after six years at the helm.
The change at the Italian telecommunication's leadership would only add to the overall turmoil besetting the company. The coalition government led by Prime Minister Enrico Letta is teetering on collapse after allies of former PM Silvio Berloscuni indicated they seek to quite the cabinet.
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