Telefonica suspends share trading
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Telefonica suspends share trading

Trading in Telefónica’s shares was suspended this morning after the operator said it would sell all of its treasury stock in an effort to reduce debt.

In a statement made Spain’s telecoms regulatory authority, the suspension was lifted, at 0900 GMT this morning. Telefónica declined to comment.

The carrier is aiming to cut debt to less than €47 billion by the end of 2013 and the sale of treasury stock - which is equivalent to 2% of the company’s capital - will not take more than a day, a Telefonica spokesperson said on Monday.

"Assuming a 5% discount versus yesterday's closing price... the company could raise €962 million, representing 22.4% of Telefonica's total debt-reduction target in 2013," Banco Sabadell, the financial services provider, said in an investors note.

The 90.1 million treasures shares are being offered at €10.8 to €11 each which is a 3.9% discount from yesterday’s trading.

The debt-cutting target is part of a scheme to reduce company debts from €51 billion at the end of 2012.

A Madrid-based analyst, Borja Mijangos, told Bloomberg: “The transaction will allow the company to substantially reduce debt. Still, the company will need to continue reducing its leverage.”

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