The CFO of Telefonica’s Brazil operations has said that the group would look to raise between €4bn and €6bn from an initial public offering of its LatAm business.
In an interview with Bloomberg, Gilmar Camurra said the flotation would take place…
The CFO of Telefonica’s Brazil operations has said that the group would look to raise between €4bn and €6bn from an initial public offering of its LatAm business.
In an interview with Bloomberg, Gilmar Camurra said the flotation would take place as soon as possible and Telefonica would look to part with between 10% and 15% of the combined business.
This would give the LatAm unit a value of roughly €40bn, or roughly 5x EBITDA. John Keith, an analyst at Sanford Bernstein, told TelecomFinance that this might prove a stretch as Telefonica Brazil only trades at 4.5x EBITDA.
Keith also questioned if it was worth listing all the business in one unit.
“Whether you’d attract much value on the Argentina and Venezuela businesses is up for debate,” he said. Both countries have very high inflation and governments fond of capital controls – Telefonica has €1.5bn sitting in Venezuela – so the assets won’t add value to the proposition.
Camurra said the entity to be listed would include all of Telefonica’s LatAm assets and shares would be listed in Madrid and London.
The IPO would be the latest measure taken by Telefonica as it looks to address its debt pile.
In its Q3 results Telefonica revealed net debt of €56bn, down €2.3bn from the end of Q2.
The company has made a number of disposals and refinanced part of its debt. In late October Telefonica placed 23% if its German unit, raising €1.45bn.
