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Silvio Scaglia, the Italian telecoms entreprenuer and founder of Fastweb, sold 5m shares to UniCredit on Tuesday, reducing his stake in the broadband group to raise funds for a new online television service.

SMS Finance, Mr Scaglia’s holding company, sold €220m worth of shares at €44.40, cutting his stake to 18.75 per cent to 25 per cent.

Fastweb’s shares fell €2.11 to €43.40 in early afternoon trading in Milan.

Mr Scaglia’s move comes amid speculation that he is planning to sell his entire stake to a private equity group. However, he has denied such plans and has decided to “lock up” the remaining shares he controls through SMS Finance for 12 months.

“Silvio Scaglia, fully confident of Fastweb’s success, intends to keep SMS Finance’s stake in the company stable,” Fastweb said in a statement.

According to Fastweb, Mr Scaglia has decided to cut his stake to finance the development of Babelgum, a new venture in the booming online video business. A test version will be launched early in March.

Fastweb, which is Italy’s second-biggest fixed line telecoms company, reported on Monday a 39 per cent rise in earnings before interest, taxes, depreciation and amortisation to €424m ($550m).

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