Telefónica Prepares Possible Sale of Non-Core Assets worth EUR5 billion-EUR6 billion -- Source
12 January 2016 - 8:28PM
Dow Jones News
By Carlos López Perea and David Román
MADRID--Spain's Telefónica SA is preparing a possible sale of
non-core assets worth EUR5 billion-EUR6 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 Telefónica officials
in November, would look to help the telecom company cut its debt
pile, which currently stands at EUR49.7 billion--slightly above the
company's market value.
Telefónica 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
Telefónica.
Telefónica 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.
Telefónica 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, Telefónica 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 04:13 ET (09:13 GMT)
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