Telefonica’s plan to list its Colombian business has been put on hold due to market conditions as the IGBC, the main index of the Bogota stock exchange, has fallen more than 14% since the start of the year.
The Spanish incumbent has pushed the…
Telefonica’s plan to list its Colombian business has been put on hold due to market conditions as the IGBC, the main index of the Bogota stock exchange, has fallen more than 14% since the start of the year.
The Spanish incumbent has pushed the prospect back until 2014 at the earliest and is now looking at other ways to raise cash, according to three people familiar with the situation cited by Bloomberg.
Telefonica owns 70% of the Colombian unit. The rest is held by the state. Reports have said the local government is reluctant to dilute its stake, and according to Bloomberg Telefonica will be keenly watching the country’s presidential elections next May.
Should Telefonica be able to float the unit, consensus estimates from April suggested it could raise €600m (US$772m) by selling a 20% stake.
Telefonica said it is on good terms with the government and is looking at ways to strengthen the capital structure of the unit – without ruling out an IPO – according to a spokesperson.
The Spanish telco is looking to cut its net debt from €51bn to €47bn by the end of the year.
Last month it sold O2 Ireland to Hong Kong’s Hutchison Whampoa for an initial €780m, which could rise to €850m depending on future performance of the unit.
Earlier in the year Telefonica sold a 40% stake in its Central American unit for €382m, and has reportedly mandated BofA Merrill Lynch to look at further asset sales in countries such as the Czech Republic.
Last year Telefonica Colombia generated revenues of €1.77bn – which made up 2.8% of Telefonica’s total revenue for 2012 – and reported OIBDA of €607m. It has a 21.6% mobile market share and an 18.1% share of the fixed-line market.
Telefonica had previously mulled listing 15% of its entire Latin American business together – the operations were valued at around €40bn – but it shelved that idea in February.
