Telefónica is said to be considering the sale of parts of its core businesses. The company, which is struggling to reduce its massive debt burden of €55 billion, is investigating the sale of shareholdings in its Brazilian and Czech Republic subsidiaries according to a Financial Times Germany report.
Insiders close to the discussions claim that Telefónica is also looking to offload its stakes in businesses less central to its strategy such as Portugal Telecom, Zon Multimedia, Hispasa and Amper.
While the company has just undergone a significant restructuring, the need to divest core and non-core assets would appear to have been rushed forward given that the European financial crisis has caused Telefónica to pay significantly higher interest rates on its debt. The situation is worsened by the company facing the need to refinance €4 billion in 2012.
This possible sell-off of assets will also be accompanied by cost reductions across other Telefónica business units as the need to fund investments in new ventures increases, the report said.
Separately, Bloomberg reported that revenues from Telefónica domestic operations should grow in 2012 as efforts to reduce churn take effect. "There is a change in consumer habits toward telecommunications and we are at the base of the consumption pyramid," said Luis Miguel Gilperez, president of Telefonica Spain, in an interview with Bloomberg in Madrid. "2012 is our year of growth," he said, referring to revenue. This may be "derived from our market revival or from our competitors being in a worse position."
For more:
- see this Financial Times Germany article (translated via Google Translate)
- see this Bloomberg article
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