Telefónica announces debt restructure in Colombia

Telefónica announces debt restructure in Colombia

Telefónica has reduced its debt by €1.3 billion after agreeing a deal with its Colombian subsidiaries and the Colombian government.

The Spain-based operator, which reported an overall group deficit of €56 billion at the end of 2011, has struggled to cope with a volatile European market, and the company has seemingly turned to its more profitable Latin American operations for growth.

Telefónica owns a 52% stake in Colombia Telecom, with the state controlling the remainder of the company. According to Reuters, the government has taken 48% of debt owed by Colombia Telecom to PARAPAT, an asset management fund which was formerly owned by the Colombian operator.

Colombia Telecom’s expected merger with Telefónica’s wholly-owned Columbian mobile subsidiary, which is still subject to approval, will see the European operator control a 70% stake in the new company and also reduce considerable debt off its books. Data from Bloomberg suggests Telefónica’s regional sales in Colombia increased by 2% last year, amounting to €1.56 billion.

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