Telefónica could carry out an initial public offering (IPO) for its Telxius mobile tower unit as soon as July as part of measures to reduce group debt, reported Bloomberg.
Citing unnamed sources, the news agency said the Spain-based operator has now added CaixaBank and Banco Bilbao Vizcaya Argentaria as global coordinators, along with Goldman Sachs Group and JPMorgan Chase & Co. Mediobanca, BNP Paribas, HSBC Holdings, Banco Santander SA, Citigroup and UBS Group will also act as book runners for the IPO while other banks have also been added as lead managers, the sources said.
The IPO could raise between €4 billion ($4.5 billion) and €5 billion and would form part of Telefónica's strategy to reduce its €50.2 billion debt mountain. However, the IPO proceeds would then amount to less than half the amount the company would have raised if it had sold O2 UK to CK Hutchison as planned. The European Commission blocked that proposed deal over competition concerns.
Telefónica has not confirmed the Bloomberg report, but did say in February that an IPO was a potential option for the tower unit.
"In relation to Telxius, Telefónica is analysing alternative strategies, including a possible initial public offering," the company said at the time in a statement to market regulator CNMV.
Telefónica created Telxius as a new business unit that in future will be responsible for the management of its mobile towers and submarine optical fibre network in order to better optimise the company's global asset portfolio.
The operator said around 15,000 towers in Spain and other countries and its 31,000 km submarine cable would initially be brought into the unit and proposed Alberto Horcajo as Telxius CEO.
In April, Telefónica Deutschland said it plans to sell almost all of its mobile towers to Telxius, receiving €587 million for 2,350 towers.
A recent report by TowerXchange, which specialises in research into the telecoms tower industry, noted that Telefónica's move was part of a general trend among operators in Europe to hive off and divest their mobile towers.
The research company predicted that independent tower companies would own 48 per cent of European mobile towers by 2020.
"The recent carve out of Telefónica's 11,000 towers into subsidiary, Telxius, the imminent sale of Telecom Italia's infrastructure unit, Inwit, combined with the commencement of VimpelCom's process to divest its towers across Russia and the CIS are just some of the key transactions accounting for this change in ownership," the company observed.
- see this Bloomberg article
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