MILAN – Telecom Italia’s possible acquisition of a controlling stake in Turk Telekom would be negative for the Italian operator’s credit rating, ratings agency Standard & Poor’s said yesterday. Telecom Italia is one of several bidders for Turkey’s state-owned fixed-line operator and the Italian group’s chairman said last week it will bid with partners, limiting its outlay to «a few hundred million euros.» S&P, in a report published yesterday, said that while the cash cost of a bid remained unclear, it had other concerns. «We would view the acquisition by Telecom Italia of a significant stake in Turk Telecom as a negative credit event,» the ratings agency said. «Beyond the cash contribution, Telecom Italia would gain control of a company with a credit profile that corresponds to that of a non-investment grade… entity, and the group’s exposure to a volatile currency, economic and regulatory environment would significantly increase.» The ratings agency also said buying the 55 percent of Turk Telekom up for sale would stretch management at a time when the Italian operator was also trying to expand its operations in Brazil. «Last, but not least, the transaction would be viewed as a material departure from our debt-reduction expectations,» the report said. S&P said the acquisition of a significant stake in Turk Telecom was not factored into Telecom Italia’s «BBB+» long-term credit rating which has a stable outlook. Telecom Italia Chairman Marco Tronchetti Provera said last week the group would not be distracted from its debt-cutting targets if it was successful with its bid for Turk Telekom. Telecom Italia is aiming to cut its debt of 43.5 billion euros ($55 billion) to less than 33 billion euros by the end of 2007. The Italian operator and Turk Telekom are already partners as joint owners of Turkey’s No. 3 mobile operator Avea. Telecom Italia has chosen Turkey and Brazil as its key growth markets to offset its reliance on Italy, where competition is expected to grow in coming years. Turkey’s privatization board has set June 24 as a deadline for bids for Turk Telekom. Operators including Belgium’s Belgacom SA and Spain’s Telefonica have withdrawn from the sale.