Telefonica is postponing the flotation of its infrastructure unit because it was unable to garner enough interest in the share sale.

It said in a statement it had decided to “abandon the offering” because the valuation of Telxius that was “implicit in the purchase orders” was “inadequate”.

It added that it “will continue analysing strategic alternatives” for the unit.

The Spanish operator planned to raise around €1.5 billion by selling 40 per cent of Telxius, part of a strategy to reduce debt, and also hopes to list about 30 per cent of its O2 unit in the UK as soon as December.

It had previously been reported that investors would be concerned about how to assess Telxius’ submarine cable assets and may want to put a lower price on these operations compared to what they are willing to pay for the unit’s wireless towers.

After the delay, a source told the Financial Times the valuation process was impacted by the “market situation” and “lesser knowledge” among investors of Telxius’ underwater cable businesses.

The source also said Telefonica had “sufficient options to keep its investment grade rating” and would not be selling assets “at a loss”.

The IPO plans had suffered a delay previously, as a result of market turmoil following the UK’s European Union exit referendum.

Telxius holds assets including around 16,000 wireless towers in Spain, Germany, Brazil, Peru and Chile, and an extensive fibre network.