Telefonica eyes sale of German division as tries to reduce debt
SPAIN’S Telefonica, under increasing pressure to slash its debt pile, said yesterday that it was preparing to list its German unit and possibly other businesses in Latin America, stepping up its plan for disposals.
Telefonica needs to raise €7-8bn a year through 2015 to cope with debt maturities and is also struggling with sinking revenue and profits in its home market of Spain, where one in four is unemployed and the banking industry is in crisis, pushing the state’s cost of borrowing higher.
Telefonica did not say how much of its 02 Germany business it would seek to list.
The group had already announced efforts to sell €1.5bn in non-core assets, and the potential listings would bring in a much-needed cash infusion, which would then be used to pay down debt.
Telefonica said in a statement that its board was in favour of “proactive” management of its assets, and that as well as the German listing, it was analysing similar moves in Latin America.
It added it would be paying out €1.50 euros per share to shareholders for 2012, but would alter the structure so roughly €0.40 of the dividend would be in cash and the rest in a scrip dividend and share buybacks, which would take pressure off its cash flows.
It plans to pay out a similar amount for 2013.