Rumour Mill: Telefónica mulls sale of assets to ease debt burden

Telefónica is said to be considering the sale of parts of its core businesses. The company, which is struggling to reduce its massive debt burden of €55 billion, is investigating the sale of shareholdings in its Brazilian and Czech Republic subsidiaries according to a Financial Times Germany report. 

Insiders close to the discussions claim that Telefónica is also looking to offload its stakes in businesses less central to its strategy such as Portugal Telecom, Zon Multimedia, Hispasa and Amper.

While the company has just undergone a significant restructuring, the need to divest core and non-core assets would appear to have been rushed forward given that the European financial crisis has caused Telefónica to pay significantly higher interest rates on its debt. The situation is worsened by the company facing the need to refinance €4 billion in 2012.

This possible sell-off of assets will also be accompanied by cost reductions across other Telefónica business units as the need to fund investments in new ventures increases, the report said.

Separately, Bloomberg reported that revenues from Telefónica domestic operations should grow in 2012 as efforts to reduce churn take effect. "There is a change in consumer habits toward telecommunications and we are at the base of the consumption pyramid," said Luis Miguel Gilperez, president of Telefonica Spain, in an interview with Bloomberg in Madrid. "2012 is our year of growth," he said, referring to revenue. This may be "derived from our market revival or from our competitors being in a worse position."

For more:
- see this Financial Times Germany article (translated via Google Translate)
- see this Bloomberg article

Related Articles:
Telefónica in talks to share German backhaul network
Telefónica plunges to quarterly loss, dragged down by Spain
Telefónica to cut handset portfolio by nearly 60%
Telefónica drops separate Spanish unit in bid for growth
Telefónica's O2 encourages users to shape new services
Telefónica and the irrelevance of mobile operators

Suggested Articles

Wireless operators can provide 5G services with spectrum bands both above and below 6 GHz—but that doesn't mean that all countries will let them.

Here are the stories we’re tracking today.

The 5G Mobile Network Architecture research project will implement two 5G use cases in real-world test beds.