Telefonica has restructured the finances of its German unit ahead of its planned IPO, set to take place by the end of year.
The indebted Spanish parent company received a dividend of €4.3bn (US$5.5bn) from Telefonica Deutschland, which operates under…
Telefonica has restructured the finances of its German unit ahead of its planned IPO, set to take place by the end of year.
The indebted Spanish parent company received a dividend of €4.3bn (US$5.5bn) from Telefonica Deutschland, which operates under the ‘O2’ brand, on 14 September, Bloomberg reported with reference to bank documents.
Telefonica, which has €57bn of debt, has also cancelled a planned €2.9bn capital payment to the German unit, whose net debt will reach €1.2bn by the end of December, the report stated.
A Telefonica spokesperson described the financial restructure as “completely normal” in the context of the planned IPO, saying the diverted funds have always belonged to the group.
“Telefonica Deutschland is being carved out of the group, but it continues to be group money,” he said.
While the size of the stake to be listed on the Frankfurt Stock Exchange is yet to be determined, it is expected to be in the region of 20-30%. Specific details on size and pricing are likely to arrive within the next few weeks.
Pressured by its domestic operations, the Madrid-based parent group has sought to cut debt, improve liquidity and maintain agency ratings. Cesar Alierta, the company’s chairman, told investors in July that it planned to launch the German IPO in the fourth quarter, having deciding “swift action” is needed.
Announcing the planned listing on the Frankfurt Stock Exchange on 3 October, Telefonica Deutschland highlighted its strong financial profile and said it planned to pay shareholders a dividend of €500m in 2013 based on this year’s profits.
The company recorded revenues of €5bn for 2011 and OIBDA of €1.1bn. For the first half of this year, revenues stood at €2.6bn and OIBDA at €597m, representing year-on-year increases of 5% and 12% respectively. Net debt as of 30 September 2012 stood at €1.1bn, with the company targeting a medium-term leverage ratio (net debt/OIBDA) of less than 1.0.
As reported this morning, Telefonica has also agreed to sell its Spanish call centre Atento to US PE firm Bain Capital for €1bn (US$1.3bn).
