Telefonica suspends share trading
26 March 2013 | Mitch Sayers
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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