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JP Morgan to back KKR’s €45bn financing in TIM deal

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Tokenization of real world assets is finally seeing adoption by financial institutions. This time it’s different as the technology is more mature, regulators are supportive and there’s an increasing mindset on the topic.  For anyone following blockchain and Web3, the tokenization of real-world assets (RWA) might have a familiar ring. Expected to be a key driver of the adoption of blockchain technology for the next couple of years, RWA tokenization has already been explored in past cycles, specifically between ‘16 and ‘18. In this article I’ll uncover what is different this time and quantify some of the adoption we’re seeing by the large financial players.
Tokenization of real world assets is finally seeing adoption by financial institutions. This time it’s different as the technology is more mature, regulators are supportive and there’s an increasing mindset on the topic.  For anyone following blockchain and Web3, the tokenization of real-world assets (RWA) might have a familiar ring. Expected to be a key driver of the adoption of blockchain technology for the next couple of years, RWA tokenization has already been explored in past cycles, specifically between ‘16 and ‘18. In this article I’ll uncover what is different this time and quantify some of the adoption we’re seeing by the large financial players.

US fund KKR’s proposal to buy Telecom Italia has received a letter of commitment from JP Morgan to support the €45bn (£38bn) financing needed for the deal.

JP Morgan said in the letter it was ready to lift its commitment above €45bn if necessary, Italian daily Il Messaggero first reported.

Sources have confirmed confirmed the investment bank’s role in arranging the financing for the bid. It has previously been reported that JP Morgan was advising KKR together with Citi and Morgan Stanley.

In the non-binding proposal submitted to TIM’s board, KKR has set an indicative price of 0.505 euros a share, valuing Italy’s biggest phone group at 10.78 billion euros or 33 billion euros including TIM’s net debt of 22.5 billion.

Il Messaggero said €34bn in the financing package would be used to refinance TIM’s debt under a “change of control” clause, with an additional 11 billion euros representing a cash confirmation required by market regulators to cover the offer’s equity value.

According to sources, the fund’s plan is to carve out the group’s fixed network – of which KKR is an investor since last year – leveraging on the fact that company’s shares are at historic lows.

TIM’s chief executive Luigi Gubitosi was forced to struck a €1.8bn deal with KKR, giving the New-York fund a 37.5 per cent stake in FiberCop, the part of the business that deals with last-mile network.