November 28, 2012 / 12:36 PM / 5 years ago

Telefonica takes step closer to Latin American IPO with holding company

MADRID (Reuters) - Spain’s Telefonica SA (TEF.MC) took a step towards a possible stock market offering of its Latin American operations, creating a Madrid-based holding company for its assets there.

The logo of Spain's telecommunications giant Telefonica is seen at the company's headquarters in Madrid July 29, 2010. REUTERS/Susana Vera

Newspaper Expansion had reported on Monday that Telefonica was considering grouping its Latin American businesses into a Spanish holding company to list on the New York Stock Exchange.

Debt-laden Telefonica has sold a number of assets this year, including part of its stake in China Unicom (0762.HK) and call-center business Atento.

The group expects its debt to fall to 50 billion euros ($65 billion) by the end of the year from 56 billion at end-September. If it needs to raise more cash next year, it could list its Latin American businesses which account for more of its revenue than Europe.

A spokesman for Telefonica said on Wednesday the company was studying a listing of its South American assets but no decision had yet been taken.

Telefonica Latinoamerica Holding will be managed by Manuel Crespo, Spain’s official merchant register (BORME) showed.

Telefonica had said a listing was possible when it presented nine-month results earlier in November. Chief Financial Officer Angel Vila said the company was working on preparations in case it decided to go ahead with the listing.

Telefonica Latin American Chief Executive Santiago Fernandez Valbuena said he did not believe in separately listing operations in individual countries.

A Latin American listing could be attractive to investors as the fast-growing region offers good prospects, especially compared with recession-struck Spain, where Telefonica’s nine-month revenue tumbled 13 percent year-on-year in 2012.

Telefonica successfully listed part of its German unit (O2Dn.DE) in October.

Reporting by Robert Hetz; Writing by Clare Kane; Editing by David Holmes

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