Telecom Italia is facing yet another boardroom battle after Luigi Gubitosi informed them he was willing to resign as CEO if it would help them make a decision on KKR's purchase proposal faster.

Telecom Italia's (TIM) board of directors will meet at 1400 GMT on Friday to address the impact on earnings of a soccer rights contract that has failed to boost income and resulted in two profit warnings at Italy's largest phone company since July.

On Thursday, TIM's auditors reviewed the 1 billion euro deal Gubitosi negotiated with DAZN to stream Italy's top-flight soccer events, raising new worries, according to two sources close to the case.

According to one of the sources, a further reduction in TIM's financial prognosis is possible. TIM is burdened by debts that are almost four times its core profit.

S&P downgraded the company's debt rating, which was already labeled as "junk" last week.

Another two persons familiar with the situation stated that after the downgrading, KKR raced to submit its offer, claiming that TIM was in danger of breaching bank covenants.

TIM's major investor, Vivendi, has attacked Gubitosi, who has volunteered to renounce his managerial duties without standing down as a director.

That means his responsibilities must be transferred to another board member, or a board member must retire to make room for a new CEO.

Gubitosi chastised directors in a letter to the board, a copy of which was seen by a major Newswire, for delaying KKR's bid to appease some of the group's shareholders.

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Gubitosi's spat with Vivendi is the latest boardroom squabble at TIM, which has had three CEOs since 2015 when the French media conglomerate began acquiring a 24% stake.

Gubitosi denied rumors that he was close to KKR in the letter, and requested the board to provide the New York-based firm access to corporate data and nominate advisers.KKR, Ontario Teachers' Raise Bid for Australian Energy Firm - Bloomberg

On Sunday, TIM's board of directors considered KKR's non-binding bid to take the company private for 10.8 billion euros ($12 billion).

KKR has requested a four-week due diligence investigation of TIM, which is valued at 33 billion euros including net debt.

Last year, Gubitosi signed a 1.8 billion euro agreement with KKR, giving the fund a 37.5% share in TIM's so-called last-mile network, which reaches into people's homes.

The offer to buy TIM as a whole comes as Italy prepares to spend 6.7 billion euros from the European Union's recovery fund to speed up the implementation of ultra-fast broadband across the country.

Italy's primary telecoms infrastructure is TIM's fixed network, which the government wants upgraded to fibre optic, and Rome has said its stance on the KKR proposal will be determined by the network's ambitions.

Although Rome has specific authorities to prohibit deals involving important companies like TIM, Prime Minister Mario Draghi's executive has praised KKR's interest as good news for Italy.

According to sources, KKR aims to carve out the network and give state investor CDP - currently TIM's second-largest shareholder - a key position in controlling the asset after consulting with the government before submitting its proposal.