UPDATE 1-Telefonica sheds treasury stock in debt-cutting drive
* Could raise around 1 bln euros
* Goldman Sachs mandated to sell just over 90 mln shares
* Sale represents 1.979 pct of capital
* To be carried out in accelerated bookbuild
MADRID, March 25 (Reuters) - Telefonica, Europe's biggest telecoms operator by revenue, is selling all its treasury stock, equivalent to 2 percent of the company's capital, as it pushes to slash debt.
It could raise around 1 billion euros ($1.3 billion) from the sale, based on Monday's closing share price of 11.2 euros.
It has mandated Goldman Sachs to carry out the disposal of just over 90 million shares to professional investors, representing 1.979 percent of Telefonica's capital.
The sale will be carried out via an accelerated bookbuild and should not take more than one day, the company said in a stock market notice on Monday.
A spokesman for Telefonica in Madrid said the company would use proceeds to pare debt.
The former Spanish monopoly has said it will cut debt to under 47 billion euros ($60.55 billion) by the end of the year, from over 51 billion euros at end-2012.
Telefonica, which ran up debt during a credit-fuelled expansion into Latin America and other markets in the 1990s, shed a number of assets last year, including part of its stake in China Unicom and call centre business Atento.
The company had considered floating its Latin American operations to raise up to 6 billion euros but later dropped the plan after successfully reducing its debt from over 58 billion euros at end-June.
Telefonica is expected to shed a number of smaller assets this year to hit its debt target and maintain its prized investment grade credit rating.
The company sold its British broadband and fixed-line telephony business for 200 million pounds ($303.66 million) to television group BSkyB earlier this month.