BUSINESS

Telefónica to list German unit this year

Shareholders will receive dividend payout of 500 million euros in 2013

Spanish telecoms giant Telefónica said Wednesday it was planning to float its German unit in the last quarter of this year through a public share offer, with the company due to list on the Frankfurt Stock Exchange.

Telefónica has yet to determine the size of the offer but will remain Telefónica Deutschland Holding’s majority shareholder.

The proceeds from the offer will enable the Spanish company to reduce its financial debt to ensure it retains its credit ratings. Telefónica scrapped its dividend of 1.5 euros per share for this year and is also selling off other non-strategic assets such as its call-center unit Atento.

Telefónica’s net financial debt as of the end of June stood at 58.31 billion euros.

To sweeten the share offer, Telefónica will offer potential shareholders a dividend payout of 500 million euros next year and also intends to increase the amount distributed in future years.

Telefónica Deutschland posted a five-percent increase in revenues to five billion euros last year and operating income in the form of OIBDA of 1.1 billion, a rise of five percent over a year earlier. In the first half of this year revenues were up five percent at 2.6 billion euros, while OIBDA was up 12 percent at 597 million

As of the end of September, the unit had net debt of 1.1 billion euros. The company is targeting a net debt/OIBDA ratio over the medium term of 1.0 times.

JP Morgan and UBS Investment bank have been appointed as global coordinators for the offer. Bookrunners include BofA Merrill Lynch, BNP Paribas, Citigroup and HSBC, with Banco Santander one of the co-lead managers along with BBVA and Commerzbank.

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