Telefonica has put plans for an IPO of its Latin American business on hold, according to Bloomberg sources.

The IPO has stalled as the need for the Spanish operator group to raise funds has been reduced in recent months, the sources said.

Telefonica suspended its dividend and sold a 23 per cent stake in its German unit, raising EUR1.45 billion, towards the end of 2012. It also raised EUR1.5 billion through the issue of 10 year bonds last month.

Work on the IPO has been suspended and will not resume unless there is strong investor interest or increased pressure from rating companies, the sources added.

An IPO of the Latin American business was first considered in May last year as the company analysed its potential to reduce its debt. The head of finance for Telefonica’s Brazilian unit said in December that the IPO could raise as much as EUR6 billion.