Telefonica has sold a €1.3bn (£1.1bn) stake in its Spanish infrastructure division, a move that paves the way for it to refocus on plans for the London listing of O2.
The Spanish telecoms giant sold a 40 per cent share of Telxius Telecom to private equity firm KKR, in a deal that values its infrastructure subsidiary at €3.2bn.
KKR saw off competition from Singapore's sovereign wealth fund, GIC, which was working another private equity heavy hitter, CVC.
Telxius owns and operates nearly 16,000 telecommunications towers across five countries and has around 65,000km of submarine fibre optic cables. It is one of a number of assets Telefonica was hoping to flog in order to pay down some its bulging £47bn debt pile. O2 is another asset the Iberian firm hopes can be sold to raise capital.
In 2015, Telefonica agreed to sell O2 to fellow UK operator Three in a deal worth £10bn. The sale was blocked by the European Commission in May and Barclays, together with number of other investment banks, was asked to prepare O2 for a London listing.
The O2 float was shelved in October with Telefonica citing market concerns as the reason for pressing the pause button.
But with market conditions improving and news of an agreement on the Telxius deal it is likely Telefonica will reignite plans to spin off O2.