Telefonica has sold almost half its stake in China Unicom back to the Chinese operator in a deal worth US$1.4 billion.
The Spanish-based operator said in a regulatory filing that the sale "forms part of the proactive management of its asset portfolio." However, it also appears linked to efforts by the operator to raise funds to pay-down debt and protect against the effects of the deepening Eurozone crisis, which led to an EU bailout package for the Spanish banks over the weekend.
Unicom is to pay HKD10.21 per share for almost 1.1 million of the Unicom shares owned by Telefonica, reducing the Spanish firm’s stake in the Chinese number-two operator to 5.01 percent, from 9.57 percent previously. The deal is expected to close in July, subject to regulatory approval.
Telefonica said it remains committed to the market, while its chairman, César Alierta, will retain his position as a Unicom director.
The Chinese deal follows an announcement two weeks ago that Telefonica plans to sell-off assets in German and Latin America.
The firm said at the time it is “accelerating the disposal process of non-core assets” in order to “increase its financial flexibility” and maintain “an attractive remuneration for its shareholders.”
Telefonica’s market value has slumped by almost EUR50 billion over the last 18 months and the firm had net debt of EUR57.1 billion at the end of March.