Telefó nica Prepares Possible Sale of Non-Core Assets
January 12 2016 - 4:40AM
Dow Jones News
MADRID—Spain's Telefó nica SA is preparing a possible sale of
non-core assets worth €5 billion-€6 billion ($5.43 billion-$6.52
billion) including telephony towers, a person close to the
situation said Tuesday.
The well-flagged move, first announced by Telefó nica officials
in November, would look to help the telecom company cut its debt
pile, which currently stands at €49.7 billion—slightly above the
company's market value.
Telefó nica is trying to complete the $14 billion sale of its O2
U.K. unit to rival CK Hutchison Holdings Ltd., which is now being
reviewed by the European Commission. The company is aiming to seal
the deal in the second quarter, but analysts have expressed concern
that Europe's top antitrust regulator may set stringent conditions
on the sale, effectively making it less profitable for Telefó
nica.
Telefó nica officials have previously said that they are
considering alternatives to raise additional funds in such case,
also including a possible listing of the company's Mexican unit.
The person close to the situation said the company hasn't yet
decided which specific assets may be sold or listed, adding that
any move would take place in coming months.
Telefó nica has often signaled its strategy is now focused on
cutting debt while maintaining a strong dividend policy that is a
top draw for institutional investors such as pension and investment
funds.
In a recent note to investors, analysts at Bankinter said that,
if the O2 deal is scrapped, Telefó nica may be forced to switch
from a cash dividend to a less appealing scrip dividend, to be paid
in company shares.
Write to Carlos Lopez Perea at carlos.perea@wsj.com and David
Roman at david.roman@wsj.com
(END) Dow Jones Newswires
January 12, 2016 04:25 ET (09:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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