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Brazilian telecoms operator TIM's migration to the local stock exchange's Novo Mercado will benefit the company's future strategy and its shareholders, parent company Telecom Italia (NYSE: TI) CEO Franco Bernabe said in a conference call with investors.
TIM is fully controlled by Telecom Italia, a European telecoms operator.
Highlighting the Novo Mercado's listing of companies "with the highest possible standards of corporate governance," Bernabe said TIM Participações "will be the first telecommunications company to be listed on the segment. This decision is driven by the desire to align TIM's corporate governance to the best practices in the market, to increase TIM's share liquidity - both in Brazil and in the US - and to align the rights of all shareholders."
The move - which had the TI board's full support - looks to simplify TIM's capital structure so that "the true value of the company will rapidly surface," he added.
"I think that our move will be followed by other major players," Bernabe said. "What we want to [show] with this is that we are in Brazil to stay. We think that the potential for growth of the Brazilian market is strong."