Debt weighs on the shoulders of Telefónica. The Spanish group which controls 40% of the Telco holding, which in turn owns 41,30% of Telecom Italia, sold a 4,56% stake in China Unicom for 10,96 billion Hong Kong dollars, equal to 1,128 billion euros at current exchange rates. The operation is part of the strategy to reduce debt. The company chaired by César Alierta has ensured that the sale, subject to authorizations and which will close by 31 July, will allow Telefonica to “increase its financial flexibility” and at the same time will allow it to continue to be a significant shareholder of China Unicom with a 5,01% stake.
“This transaction” reads the press release, “reflects the decision of Telefónica's board of directors to manage its asset portfolio more efficiently and the willingness to Telefonica and China Unicom remain fully committed to their strategic alliance".
Indeed Alierta will continue to sit on the Board of Directors of China Unicom and the president of China Unicom, Chang Xiaobing, will do the same on Telefónica's board. In addition, the Spanish telecommunications giant has undertaken not to sell, directly or indirectly, the shares of China Unicom it owns for a period of 12 months from the date of the agreement.
THEbuyer of 4,56% of Telefónica is China United Network Communications Group Company Limited ('Unicom Parent'), to which 1.073.777.121 shares will be transferred.
The Spanish group bears a debt of 57 billion euros which the company is seeking to reduce through a strategy of divestment of non-strategic assets. For this Telefónica would be ready to sell even a 2% stake in Portugal Telecom and would be preparing to sell the online booking service Rumbo and the call center company Atento. From these operations, the Group expects to obtain 1,5 billion euros in revenue.
