Telefonica Mulling Over Sale of Latin American Stake: Report

The Madrid-based operator, feeling suffocated under a mountain of around US$50 billion in debt, is on the lookout for equity investor groups like KKR.

telefonica

Spanish telecom giant Telefonica is reportedly thinking about selling a part of its stake in Latin America in a desperate bid to reduce the debt weighing down on its share price.

The Madrid-based operator, saddled with around US$50 billion in debt, is on the lookout for equity investor groups like KKR, whom it sold 40% of its stake in Telxius last year, according to Spanish news paper Cinco Días.

The news comes weeks after the European bank BBVA revealed that it had written down US$1.4 billion on the value of its stake in Telefonica.

Over the past few years, Telefonica has been selling its assets one after another. In March, 2013, it sold off 40% of its assets in four Central American countries to Corporacion Multi Inversiones (CMI) for US$500 million. Two years ago, it put a minority stake in its British subsidiary O2 up for sale.

Telefonica operates under the brand of Movistar in most Latin American countries, but in Brazil it is known as Vivo.

In fact, the carrier’s Latin American operations are making profits. So much so that the revenue earned in the region is helping the company fuel growth in some European markets.

No matter who comes forward to purchase the stake, Telefonica will not sell off its Brazilian operations, says Cinco Dias, because Brazil is its biggest single telecom market in Latin America and Vivo controls around 30% market share in the country.

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