Telefónica has released a statement in relation to the flotation of its cable and mast business unit Telxius – it isn’t happening any more.
You have to feel a bit sorry for the poor Telefónica execs. They’re trying their hardest to reduce the €53 billion debt the company is currently sitting on, but for every idea there seems to be a road-block. It’s like the universe is saying ‘not so fast boys; it’s not going to be that easy’. The team wanted to raise €1.2 billion off the back of the sale, though it would appear not enough was done to raise interest in the marketplace.
Aside from the sheepish turnaround, regulators blocked attempts from Telefónica to sell its O2 brand to CK Hutchison earlier this year. The point of irritation was based around competition claims; should CK Hutchison buy O2 to supplement its Three brand, one of the mobile players would be removed from the UK market and competition would be reduced. Europe is very sensitive about these matters meaning the €10 billion lifeline the Telefónica execs almost had in their hands was pulled away by regulators.
The team has not given up on the €1.2 billion target set upon the flotation of 40% of Telxius as “it will continue analysing strategic alternatives in relation to such asset”, but it would appear the market doesn’t want anything to do with the infrastructure business right now.
While it would only have wiped off around 2% of the debt which the company is desperate to get rid of, it would have provided a nice bit of breathing room. Oh well. Nice try guys, what else have you got up your sleeve?