A group of  banks are preparing to lend INWIT up to 2.5 billion in an effort to help it merge its towers with Vodafone’s, Reuters reported. INWIT is the tower unit of the Italian phone company Telecom Italia. 

Telecom Italia controls 60 percent of INWIT. In February, the company decided to examine the possibilities of combining towers with Vodafone in Italy in a single unit. Reuters reported that together they will have a combined total of 22,000 towers in the country. 

The deal between Vodafone and Telecom Italia is part of their three-year strategy plan which is focused on bringing back on track the latter, with more than 25 billion debt.

Banks including UniCredit, Intesa Sanpaolo, Mediobanca, Goldman Sachs and BofA-Merrill Lynch are actively working on finalising the bridge-to-bond loan. However, other lenders could eventually participate in the deal. 

These loans are typically short-term facilities provided by banks until the company is able to access long-term financing from capital markets. A local media Italian daily Il Messaggero said that the banks are working out a five-year loan to help with the partnership between the two telecom companies.

It appears that INWIT would use a part of the new funding to develop its business. 

Reuters said that the merger between Vodafone and Telecom Italia will provide them with equal shareholdings and governance rights in INWIT.  

Vodafone launched commercial 5G services in five cities across Italy earlier last month. With the launch, Vodafone will allow three select smartphones Xiaomi Mi Mix 3 5G, LG V50 ThinQ 5G and Samsung Galaxy S10 5G to use the new network.