Telefonica Mulls More Disposals to Pay Down Debt

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Spain's Telefonica is reportedly looking at fresh asset sales to help pay down debt only a few months after it scrapped plans to sell a stake in its Latin American operations.

The company has a target of cutting its EUR51 billion of debt by at least EUR4 billion this year.

Citing people familiar with the situation, Bloomberg News reported that the company's O2 Ireland and Czech Republic subsidiaries are being considered for sale. The company floated a stake in O2 Germany last year, but recently ruled out a similar move for its UK division.

Other options are reported to include Telefonica's 5 percent stake in China Unicom, which has been valued at around USD1.6 billion. That sale could not take place before June though, as the company made a commitment to hold onto its shares for at least a year when it sold a 4.56% stake in China Unicom last year.

The company saw its debt ratings cut last year as ratings agencies worried about the ability of the company to maintain its creditworthiness. Since then a sale of a stake in its German operations and improved performance in Latin America has lifted the financial pressure somewhat.

However, at the moment, no decision has been made and no banks have been hired, the sources added.

On the web: Bloomberg News

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