Phone is ready for EU veto the sale of O2 – Investing.com Spain

By Andrés González and Julien Toyer

MADRID (Reuters) – The Spanish multinational Telefonica (MC is ready for a possible veto of the European Commission (EC) on the sale of its British subsidiary O2 and Friday showed the market a battery alternatives to try to reduce its debt of 50,000 million euros.

the group, which is awaiting the decision of the EC on the sale of its subsidiary Hutchison (LON by 10,300 million pounds, continues to grow in organic terms and says no need to hastily sell its British subsidiary, which would substantially reduce debt.

“(O2) is an active very attractive, we have many alternatives, some allow us to combine the generation of UK box with a partial divestiture, others involve loss of control, we also have solutions in the capital market or the sale or merger of the asset, “said CFO Telefonica, Angel Vilá.

“No hurry,” he said, explaining that the cash flow and OIBDA O2 also support the leverage of the group.

in addition to these alternatives O2, the company recognized that also studying operations in the matrix. issuing hybrids for up to 6,000 million euros, payable in shares dividend and use the proceeds of an IPO of Telxius

Telefónica had been proposed reduce its debt / OIBDA up to 2.35 times endorsing one of the requirements of the rating agencies taking advantage of the sale of O2 awaiting the decision of competition for more than a year ago.

in the quarterly results presented on Friday, the operator showed resistance at the operating level and your business in Spain and in the current context of low interest rates, reiterated its commitment to reduce debt that now exceeds its capitalization.

“our liquidity is very high, the cost of debt is at historic lows, OIBDA increased (…) the five geographies grow in OIBDA and allow us to look at debt service without concern, but we are committed to our rating and work in this direction, “Vila said.

the titles reacted negatively to comments from the conference call with analysts, and Telefonica was down 3.4 percent when considering the high market probability of a regulatory veto sale of O2 with which weeks takes speculating.

ORGANIC FORTALEZA, wEIGH tHE CURRENCIES

the group announced an operating profit between January and March of 3.376 million euros and income 10,784,000, in line with analysts’ expectations, in an exercise expected to go from strength to a less negative currency effect June to December.

Regardless devaluations currency in Latin America, revenue grew 3.4 percent and 5.5 percent OIBDA. The exchange rate hit 529 million euros in OIBDA in the operator.

“The first quarter results are in line with our expectations for the year and allow us to reiterate our financial targets and dividend of 0.75 euros per share for 2016,” said the new president of the group, Jose Maria Alvarez Pallete, in a note.

Spain grew in revenue and OIBDA for the first time since the third quarter of 2008 and just suffered leakage customers to promotions in TV high-value content.

“We see competition in Spain much more focused on value than price,” Pallete, a movement that supports its strategy of having content and high value customers added said.

Telefónica ended the first quarter with an OIBDA margin of 31.3 percent at group level and 40.5 percent in Spain, in its goal of having no erosion of margins in 2016.