Report: Telefónica considers Colombia IPO to reduce debt

Telefónica is planning to sell some shares in its Colombian business as the Spanish operator seeks new ways to reduce its debt mountain this year, according to multiple reports.

Citing unnamed sources familiar with the situation, Bloomberg reported that Telefónica plans to offer shares for a minority holding in its Colombian unit as early as this year, even though the Spanish company recently cancelled plans for an initial public offering of its entire Latin America business. Spanish online news site El Confidencial also reported on plans for a partial listing of the Colombian unit, citing unnamed financial sources.

Telefónica declined to comment, according to Bloomberg.

Bloomberg cited analysts who said Telefónica could raise €500 million from the sale of a 19 per cent stake in the Colombian unit while still keeping overall control of the business; its total stake is 70 per cent.

Telefónica wants to cut at least €4.3 billion ($5.6 billion) in net debt this year and is eyeing up a number of possible options. Potential contenders for sale also include the operator's Czech and Irish units and now even its stake in Telecom Italia, according to various reports.

Bloomberg said Telefónica is willing to end its six-year investment in the Italian incumbent, as speculation mounts that Telecom Italia is considering a merger with Hutchison Whampoa's 3 Italy unit. Telefónica owns an indirect 10.5 per cent stake in Telecom Italia via the Telco holding company, which holds a total stake of 22.4 percent in Telecom Italia.

Telefónica recently listed its German subsidiary, and the success of this IPO enabled it to halt plans for an IPO of its Latin American business, which generated about half of the company's €62.4 billion in sales last year, Bloomberg reported.

For more:
- see this Bloomberg article
- see this Reuters article
- see this separate Bloomberg article

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