Telefonica is working through a strategic plan that will pave the way for O2 float

 
Oliver Gill
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A man works on the stand of mobile opera
Telefonica has pushed its London listing of O2 back into 2017 (Source: Getty)

O2's owner has set the ball rolling on a strategic plan to clear legacy issues before either floating or selling the British mobile phone operator, according to reports.

Singapore's sovereign wealth fund, GIC, is working with private equity fund CVC to buy a controlling share in Telefonica's infrastructure division in a deal worth €1.5bn (£1.3bn), the Sunday Times reported.

Read more: Fears for London IPO market as Misys and O2 pull 2016 float plans

The division of Telefonica in question – which owns a network of phone masts and undersea cables – is called Telxius and was the subject of a failed float last September.

And the reports indicate the Spanish telecoms giant is hoping to flog the business using the proceeds to pay down its bellowing £47bn debt pile.

Once complete Telefonica will turn its attentions back to selling subsidiary O2 either through a float or sale.

Who owns O2?

Date Event
1985 Cellnet established – joint venture (60:40) between BT and Securicor
1999 BT buys out Securicor, rebrands as BT Cellnet
2001 BT Cellnet spun-off into separate company
2002 BT Cellnet rebranded as O2
2005 Spanish firm Telefonica buys O2 in £18bn deal
2014 BT in talks to buy either O2 or rival EE, ultimately went for EE
2015 Three agrees to buy O2 for £10bn
2016 (May) European Commission blocks Three purchase of O2
2016 (Sept) Telefonica appoints advisers for London listing of O2
2016 (Oct) Telefonica withdraws listing plans

A £10bn sale of O2 to competitor Three was blocked by the European Commission last May.

Read more: O2 chief executive Ronan Dunne leaving the company

Telefonica stepped up plans to spin O2 in the wake of the news, appointing Barclays to lead a raft of investment banks to run the deal.

The listing was put on ice in October, as the O2 float fell victim along with a host of other major names to concerns over market conditions.

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