Telefonica struck an agreement to sell its Movistar unit in El Salvador to UK-based General International Telecom for $144 million, its latest move to shift its portfolio towards value creation after a previous deal with America Movil went phut.
Announcing the move in a statement, Telefonica explained the deal involves the entire 99.3 per cent share capital it holds in the Movistar unit.
It said the amount agreed equalled approximately seven-times the unit’s operating income before depreciation and amortisation in 2020.
Clarifying the reasons for the move, Telefonica stated it formed part of its asset management policy based on “a strategy of value creation, improving return on capital”.
Closing of the deal is subject to certain conditions, including clearance by relevant regulatory bodies.
Such conditions acted as hurdles for a previous intention by Telefonica to sell the unit to America Movil for $315 million announced in 2019, including terms around spectrum use and alleviating competition concerns.Subscribe to our daily newsletter Back