Telefónica is looking to raise as much as €6 billion by listing shares of its Latin America operations in Madrid and London as part of its continuing effort to reduce its €52.8 billion debt.
The operator's CFO for Brazil, Gilmar Camurra, said the initial public offering will include all of Telefónica's operations in the region, and will take place as soon as possible, according to Bloomberg.
"This is an alternative for the company's plans to improve our financial position and give us flexibility," Camurra said in an interview with Bloomberg. The company wants to raise between €4 billion and €6 billion by selling a stake of 10 per cent to 15 per cent, and won't list the shares in Latin America, he said.
The Latin America region generates almost 50 per cent of Telefónica's revenues, rising 4.8 per cent to €2.69 billion last quarter as sales gained 3.8 per cent to €7.62 billion. However, revenue growth slowed from the second quarter's 5.8 per cent, according to Bloomberg.
"Providing a route for investors to play the Latin American assets makes sense, given these are Telefónica's most attractive assets," Macquarie Bank analyst Guy Peddy told Bloomberg. "Taking into account everything else the company has done to deleverage, this process should get Telefónica into the realm of what we could call 'full debt,' instead of their being under pressure."
But stock market analysts remain divided when it comes to rating the company. The most recent, Independent Research GmbH, has issued a "hold" rating on Telefónica with a share price target of €11, according to Daily Political.
NMAS 1 Agencia de Valores rated the stock as a "buy" with a target price of €13, while Nomura reiterated a "reduce" rating with a share price at €9.
For more:
- see this Bloomberg article
- see this Daily Political article
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