Telefonica plans to list up to 23.17 percent of its O2-branded German unit at between 5.25 euros ($6.79) and 6.50 euros per share, valuing the stake at about 1.52 billion euros ($2 billion), writes Reuters. Telefonica said it will set the final price for the German listing on October 29, with the shares expected to begin trading on October 30.
Reuters – Telefonica (TEF.MC) plans to list up to 23.17 percent of its O2-branded German unit at between 5.25 euros ($6.79) and 6.50 euros per share, the Spanish telecoms group said on Tuesday, valuing the stake at about 1.52 billion euros ($2 billion).
Telefonica said it will set the final price for the German listing on October 29, with the shares expected to begin trading on October 30.
“A total of 225 million shares will be offered to the market, and the lead banks will have the option to buy up to 33.75 million additional shares,” Telefonica said in a statement.
Shares will be sold from October 17 to October 29, the company said in a stock market filing.
The value of the initial public offering (IPO), at the mid-point of the share price range, prices the whole subsidiary at around 6.6 billion euros.
Telefonica’s decision to list its German unit is part of the company’s efforts to cut through its 57 billion-euro debt pile.
Telefonica Deutschland has attempted to stoke investor interest by saying it aims to pay a dividend next year totalling 500 million euros — contrasting with its parent’s decision to cancel its payout for 2012.
“We think that we offer attractive value for investors and we want to become a listed company,” said Telefonica Deutschland Chief Executive Rene Schuster in the statement.
Telefonica must raise between 7 billion euros and 8 billion euros a year through 2015 to cover debt repayments and risks rising refinancing costs if its credit ratings are cut.
Rating agency Standard & Poor’s placed Telefoncia, currently rated BBB, on credit watch negative on Friday, citing the firm’s exposure to “sovereign-related risks”.
The Spanish firm is under pressure from a financial crisis in its home market, currently suffering its second painful recession in three years. Spain could request financial aid from the euro zone next month, according to currency bloc officials.
Telefonica last week announced the sale of its Atento call center business to U.S. private equity firm Bain Capital for around 1 billion euros, including debt.
($1 = 0.7730 euros)
(Reporting by Clare Kane; Editing by Paul Day)