Telefónica rumoured to keep subsea cable unit

Telefónica rumoured to keep subsea cable unit

Angel Vila - Telefonica  16.9.jpg

Telefónica is rumoured to be avoiding an outright sale of its subsea cable unit.

According to Bloomberg, the Spanish telco plans to on-board private investors to share ownership of the business instead.

The company has reportedly been working with advisers to gather interest from potential investors and was wanting to offload the business for approximately €2 billion ($2.4 billion).

The news comes as chief operating officer, Angel Vila (pictured), carried out an interview where he said the telco will do a partial sale and then fold the asset into the standalone infrastructure division it created in 2019, called Telefónica Infra.

In his own words this new division will operate “like any infrastructure investment fund,” said Vila.

Bloomberg reports that this new investment could boost the value of the assets and raise funds to pay down Telefónica’s €35 billion ($42 billion) debts.

“A partner for the unit may not be the best way to optimise value. When you have different types of assets, you have different multiples,” added Vila.

As of 12 March, Telefónica shares were up 0.1% in Madrid overall the company’s stock has risen 23% since the start of 2021.

In related news, Telefónica Group and global investment group, Caisse de dépôt et placement du Québec (CDPQ), have announced they are building a new fibre wholesale network in Brazil.

Named FiBrasil Infraestrutura e Fibra Ótica SA (FiBrasil), the new network will be a neutral and independent optical fibre backbone to be jointly built and operated between the two companies.

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