Spain's Telefonica seeks buyer for USD 3.6bn stake in Czech unit - report. [IntelliNews - Weekly Reports]
(IntelliNews - Weekly Reports Via Acquire Media NewsEdge) Spanish telecommunications company Telefonica wants to sell its Czech unit and has hired Goldman Sachs Group and Societe Generale to find a buyer for the 69% that has a market value of USD 3.6bn, Bloomberg reported citing unnamed sources familiar with the matter.
Telefonica, which is said to be Europe's most indebted phone company, started selling assets and suspended dividend payments a year ago following ratings downgrades amid mounting debts. The Czech unit was identified as a non-core asset so selling it makes sense for Telefonica as it seeks to focus on the main European countries. Telefonica may use the sale proceeds to further deleverage and finance the next purchase eventually in Brazil, Borja Mijangos, an analyst at Interdin Bolsa in Madrid, told Bloomberg.
Telefonica Czech Republic is the country's largest telecommunications company providing services to 5.1mn mobile users and 1.4mn fixed-line clients as of end-June. The company's first-half net income fell by 26% y/y to CZK 2.4bn as both fixed and mobile revenue continued to fall on intensified competitive pressure.
Spanish Telefonica became a majority owner of the company after buying a controlling stake in the former monopoly Cesky Telecom in 2005 for USD 3.6bn.
According to Andres Bolumburu, a Madrid-based analyst at Banco de Sabadell, cited by Bloomberg, a potential buyer for Telefonica's Czech unit might be a private-equity firm or a newcomer as existing carriers (the local units of Deutsche Telekom and Vodafone) are unlikely to get regulatory approval for the acquisition.
In an interview for Bloomberg in July, Russian billionaire Vladimir Evtushenkov, owner of Russia's largest wireless operator OAO Mobile TeleSystems (MBT), said he is eyeing acquisition targets including the Czech unit of Telefonica as he seeks to expand abroad.
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