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.

Bain Capital acquires Telefonica unit in €1bn deal

Spanish telecom major Telefonica SA (MCE:TEF) said today it had sealed a definitive deal to dispose of its customer relationship management (CRM) business Atento to firms controlled by US private equity group Bain Capital LLC for about EUR1bn (USD1.3bn).

The agreed consideration represents the transaction’s enterprise value and includes a contingent deferred payment of EUR110m. The total amount also takes into consideration an EUR110m funding that will be provided by Telefonica to the buyer.

The sale needs to be greenlighted by the relevant regulators and is scheduled for completion by no later than 31 December 2012. Through it, Telefonica is looking to improve its financial flexibility. The move is also part of the policy of proactive management of the firm’s portfolio of assets, the vendor explained.

The parties have also entered into a nine-year framework agreement that calls for Atento to offer services to its former parent.

According to Telefonica, Madrid-based Atento is the multinational leader in the CRM field in Latin America and the second biggest sector player on a global basis.

The firm has since 1999 developed its business model in over 15 countries with a headcount of more than 152,000 employees. Last year, it generated revenues of EUR1.8bn. Its net debt amounted to EUR175m as of June this year.