Spanish giant Telefonica plans a spending splurge on its mobile operations in Venezuela, to stem further declines in a $3 billion cash pile that it can’t repatriate back to Spain.

According to a report from Bloomberg, quoting a presentation from the Spanish telecoms group, Telefonica had accumulated $3 billion in dividends from its Venezuelan operation, over seven years, by 9 April 2013.

However, the dividends have lost about $1.4 billion in value, not helped by the devaluation of the local currency in February.

More frustratingly for Telefonica, Venezuelan law says foreign companies can only repatriate dividend cash back home if it exceeds $12 billion.

To hedge against further declines in its cash pile value, Bloomberg reports that Telefonica is to pump up capital spending at its Venezuelan unit by 78 per cent, to BOB3.9 billion ($365 million), during 2013.

The amount excludes an additional BOB600 million reserved for 4G licences.

Having funds trapped in Venezuela is yet another headache for debt-laden Telefonica, which is aiming to reduce its net debt to less than EUR47 billion ($62 billion) in 2013 and maintain its investment grade ratings.

At the close of 2012, the Spanish group’s net debt stood at EUR51.3 billion.

To raise further cash, after shelving plans for an IPO of all its Latin American assets, Telefonica is preparing to sell shares in its Colombian operations, which could raise in excess of EUR500 million.

Other Telefonica assets reportedly under review for offloading include its Irish and Czech units, as well as its remaining minority stake in China Unicom and assets in Central America.