May 21, 2022

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Telefónica Reduces Another 400 Million In Debt

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Telefónica continues to reduce debt. The operator reported this Friday that it has closed the sale to KKR Alameda Aggregator of 60% of the shares of its infrastructure division in Chile (called InfraCo ). An operation that was announced in February and with which the telecommunications group reduces its net financial debt by “approximately” 400 million euros, as indicated to the National Securities Market Commission (CNMV).

The operation values ​​InfraCo, “implicitly”, at 1,000 million dollars (“approximately” 800 million euros at the current exchange rate), Telefónica also indicated to the Spanish stock market supervisor.

These figures, he added, represent a multiple of OIBDA 2020 (operating income before amortization) of 18.4 times.

Telefónica created InfraCo, the infrastructure division of its Chilean subsidiary (Telefónica Chile), in February last year, that is, a little over a year ago. However, the sale of a large part of its capital is framed in the current strategy of the operator.

And this contemplates, “among other objectives, an active portfolio management policy for its businesses and assets, based on the creation of value and accelerating, at the same time, the reduction of organic debt”, as the CNMV has been reminded .

9.3 billion less debt
In this sense, Telefónica has reduced its net debt over the last month by 9,300 million euros. In addition to the 400 million less communicated today, on June 3 it reported that its debt decreased by 500 million when closing the sale to American Tower (ATC) of the telecommunications tower division of its subsidiary Telxius located in Latin America (Brazil, Peru , Chile and Argentina).

Two days earlier, the ‘teleco’ chaired by José María Álvarez-Pallete said that another 3.4 billion euros of debt was being ‘discounted’ with the sale of the Telxius towers in Europe to ATC.

On the same June 1, Telefónica also announced the creation of a joint venture (or joint venture ) with Liberty Global in the United Kingdom , which reduced its debt by another 5,000 million euros.

In addition, the company has yet to materialize the second phase of the sale of the towers of Europe to American Tower, which it expects to happen in August (as indicated last month), with which it plans to ‘erase’ another 700 million of its debt .

Telefónica will publish its accounts for the second quarter (and the entire first half of 2021) on July 29 . It will be then when predictably gives more concrete figures on the evolution of its debt, a factor that has weighed heavily on the valuation of the company on the stock market over the last few years.

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