(Bloomberg) -- Telecom Italia SpA’s shares plunged the most ever on Thursday as investors expressed skepticism about the phone carrier’s plans for reducing debt.

The company said on Wednesday it foresees reducing debt to 1.6 to 1.7 times Ebitda from its current ratio of 3.8 times on a pro forma basis. Analysts said the debt ratios weren’t consistent with the company’s previous guidance to achieve certain debt targets in 2024.

Milan-based Telecom Italia outlined its business plan for the first time since it agreed to sell the landline business, its most valuable asset, to KKR & Co. last year for as much as €22 billion ($24 billion). The deal was aimed at slashing the company’s debt pile.

The shares fell 24% in Milan to close at €0.21. The move wiped out about €1.4 billion of market value in just one day.

Chief Executive Officer Pietro Labriola noted that trading volume was 12 times higher than usual. “That’s anomalous; we’ll review that situation,” he said in video call with journalists.

Read More: Italy Clears Telecom Italia’s €22 Billion Grid Sale to KKR

The former Italian telecom monopoly also projected compound annual sales growth of 3% through 2026, a significant increase from analysts’ average estimate for revenue growth of 1.2% this year and 1.1% in 2025. It sees compound annual growth in adjusted domestic earnings before interest, taxes, depreciation and amortization after leases of 9% to 10% from 2023 to 2026. 

The company said it expects positive free cash flow after lease costs within three years in its home market and in Brazil, as its struggling domestic consumer market stabilizes.

“Telecom Italia’s new ‘Free to Run’ plan, outlining the midterm outlook for the rump service companies, looks too confident on profit-growth potential,” Bloomberg Intelligence analyst Erhan Gurses said in a note, citing tough competition in the Italian market and the landline network sale as reasons the target will be hard to achieve.

Telecom Italia’s largest shareholder also objected to the plan. French media conglomerate Vivendi SE Chief Executive Officer Arnaud De Puyfontaine said the new plan “in form and substance doesn’t have our support.” The share decline has made KKR’s offer “substantially low” compared with the asset’s value, he said in a call with journalists to discuss earnings. 

The board approved Telecom Italia’s 2023 results this week. The company posted a loss of €1.44 billion, about half of what it lost the previous year, according to a separate statement. 

--With assistance from Benoit Berthelot.

©2024 Bloomberg L.P.