Spanish incumbent Telefonica reportedly reviewed a stake sale to Qatar Investment Authority (QIA), the country’s sovereign wealth fund, to reduce its debt burden.
The Madrid-based carrier was in talks with the Qatari fund last year to sell a…
Spanish incumbent Telefonica reportedly reviewed a stake sale to Qatar Investment Authority (QIA), the country’s sovereign wealth fund, to reduce its debt burden.
The Madrid-based carrier was in talks with the Qatari fund last year to sell a significant stake via a capital increase, according to a Bloomberg report citing three people with knowledge of the matter.
However, deal talks reportedly stalled when Telefonica began exploring its options for its mobile UK business late last year. The Spanish company was hoping to sell O2 to BT but the British fixed-line operator eventually entered exclusive discussions with the owners of O2’s rival, EE.
The report also suggests that QIA was not happy with the terms offered by Telefonica.
QIA and Telefonica did not reply to a request for comment.
The Spanish telco recently held talks with Hutchison Whampoa, the owner of UK’s smallest carrier Three, regarding a possible sale of O2. If a deal with Hutchison does not materialise, plans for a capital increase could be resumed, the report said.
Sky has also approached Telefonica about a tie-up with mobile operator O2, although a person familiar with the matter has told TelecomFinance that an acquisition by the British pay-TV giant is not on the cards at this stage.
Last year, Telefonica’s CFO Angel Vila was reported as saying that the telco was reviewing a number of strategic alternatives to reduce its €45bn debt burden and meet targets.
The operator issued a €850m perpetual bond in November and a 15-year €800m bond in the previous month.
The note offerings followed a €7.24bn cash-and-stock deal to purchase Brazilian broadband unit GVT last September, which will be funded with a capital increase at its Brazilian mobile unit Vivo, as well as a capital increase at group level.
