UPDATE 1-Moody's places Telecom Italia's ratings on watch after $20 bln KKR deal

(Adds background in paragraphs 2 and 5)Nov 6 (Reuters) - Credit ratings agency Moody's on Monday said it has placed Telecom Italia's B1 ratings on review for upgrade after the company's board approved KKR's 19 billion euro ($20.39 billion) bid for its fixed-line network.The sale is a key plank of TIM CEO Pietro Labriola's plans to revive the debt-laden, junk-rated former phone monopoly, which can ill afford the investments its ageing grid needs.Moody's expects Telecom Italia's financial profile to improve due to $15.03 billion net debt reduction which will help in 50% reduction of the group's reported net debt.If the deal is completed by summer of 2024, the ratings agency could upgrade the Italian company by one to two notches, according to the statement. Its top shareholder, Vivendi, which owns 24% of TIM, has been seeking a higher price and questioned the sustainability of the business left behind. It said on Sunday it considered the board's decision "unlawful", adding it would use "any legal means at its disposal to challenge" it. ($1 = 0.9316 euro) (Reporting by Urvi Dugar in Bengaluru; Editing by Chris Reese and Jonathan Oatis)