BlackRock upped its stake in Telecom Italia to make it the struggling firm’s second-biggest investor ahead of a vote for control, but did not say if it would side with top shareholder Telefonica or rebels fighting the Spanish firm’s strategy.

The world’s biggest money manager said yesterday it had 7.8 per cent of Italy’s biggest telecoms group, which is trying to revive years of sluggish growth and cut €28 billion in debt.

Telefonica believes the key to survival is selling Telecom Italia’s Brazilian business – valued over $11 billion – to lighten debt which is still heavy despite also selling assets in Argentina and issuing convertible bonds. Such a sale would also benefit Telefonica, which has been told by Brazil’s competition watchdog that it must otherwise seek a new partner for its own Brazilian mobile phone unit Vivo. – (Reuters)