Telefonica sells Central American assets for $500 million
MADRID (Reuters) - Spain's Telefonica (TEF.MC) has signed a deal to sell 40 percent of its assets in four Central American countries to Corporacion Multi Inversiones (CMI) for $500 million, as part of its drive to cut debt.
The Spanish telecoms group, which made a series of asset disposals last year, is fighting to reduce net debt to below 47 billion euros ($62 billion) in 2013 from 51.3 billion euros in 2012.
The price of the sale could increase by up to $72 million according to future performance, valuing the assets at 6.5 times earnings before interest, taxes, depreciation and amortization (EBITDA), Telefonica said in a regulatory filing on Tuesday.
For the deal, Telefonica will spin off the assets from Guatemala, El Salvador, Nicaragua and Panama into a new group which it will continue to control, opening the door for future local partnerships with CMI.
Central America, with 30 million inhabitants - a third of which are under the age of 15 - and a growing middle class, remains a key area of growth potential compared to largely saturated European markets.
Telefonica's shares, which have gained 9.4 percent so far this year, closed on Monday at 11.15 euros.
($1 = 0.7634 euros)
(Reporting by Paul Day; Editing by Tracy Rucinski and Mark Potter)
NEW YORK - The U.S. S&P500 stock index posted its worst daily fall since April and its first monthly drop since January on Thursday, as economic data sparked concern the Federal Reserve could raise interest rates sooner than some have expected.
BEIJING/HONG KONG - China reiterated its opposition on Thursday to a European Union plan to limit airline carbon dioxide emissions and called for talks to resolve the issue a day after its major airlines refused to pay any carbon costs under the new law.