MADRID- <- -> Phone <- -> SA TEF 0.89 % you are laying the groundwork for a possible IPO of its mobile operator O2 and also plans to put in the stock market a minority stake in its infrastructure unit Telxius in an effort giant Spanish telecommunications raise funds to reduce its debt.
Telefónica has “begun preparatory work” for a potential IPO O2 and also considers other options, the company said Monday. Telefónica will continue as the main shareholder in all that the company, based in Madrid, believes.
Analysts believe that O2 could be worth about 10,250 million pounds (US $ 13,600 million) CK Hutchinson Holdings Ltd offered last year, an agreement was dismantled by the European Commission.
The company said separately its intention to put in bag at least 25% of the capital of Telxius among investors qualified before the end of 2016.
Telxius is a service operator telecommunications has a portfolio of around 16,000 mobile wireless telecommunications towers located in Spain, Germany, Brazil, Peru and Chile. It also provides wholesale connectivity for international data transmission through international circuits and subsea infrastructure.
Some analysts said the double announcement of Telefonica Monday is a sign that the company is increasing its efforts to assure investors and credit rating firms are facing their debt load of more than EUR 50,000 million (US $ 55,780 million)
the credit rating firms as <.! - -> Moody’s Investors Service have said they want to see Telefónica progress in reducing its debt to maintain their qualification. Investors have expressed concern regarding the debt of the company endanger its dividend. However, Telefonica has said that this year the dividend is covered.
Telefónica had tried to sell O2 to cut its debt, but the European Commission said the acquisition by Hutchinson would have resulted in higher prices and less choice for British customers, why he blocked the agreement. After the agreement was sunk in May, Telefonica executives had to rethink what to do with O2. Then, the British voted for leaving the European Union and the following week, the company announced it would consolidate the British operator in its financial statements.
Some analysts indicate that the valuation of O2 depends mainly on the time of the IPO possible and argued that Telefonica should try to do it before BT, the former state monopoly known as <- -> British Telecom provide details on how it plans to charge its services after the purchase of EE. Regulators approved the deal earlier this year. If BT launches an aggressive pricing campaign that would force companies to British telecommunications match its low prices. That could affect earnings of companies like O2 and reduce the valuation of a possible IPO, analysts say.
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