Spain’s Telefonica considers asset disposals in a move to cut debt

Spanish telecom operator Telefonica SA (MCE:TEF) is mulling over additional divestments, which may include its Irish and Czech operations, assets in Central America and its minority holding in China Unicom (Hong Kong) Ltd (HKG:0762), Bloomberg reported, quoting people in the know.

The Irish and Czech units were tipped as being a high priority for sale.

The company has not decided yet on the disposals, which would be part of its drive to cut debt, and has not mandated banks to handle the processes, the sources said.

Telefonica had received a bid for Telefonica Czech Republic AS, which includes Slovakia, from a financial firm in 2012 but dismissed it as too low, two of the insiders told the agency.

The Spanish company shed around half of its holding in China Unicom in June, entering into a one-year-long lock-up for the remaining 5%.

Telefonica has assets in Central America in Guatemala, Panama, Costa Rica, El Salvador and Nicaragua.

Telefonica may bag EUR1bn (USD1.3bn) from its Irish and Central American businesses and also EUR1bn from a sale of a 19% stake in Telefonica Czech Republic, which would trim its holding to 50% in the Czech operator, Bloomberg said, citing estimates of FM Capital Partners Ltd. The 5% stake in China Unicom is worth USD1.6bn, the agency added.