MADRID--Telefonica SA (TEF) Tuesday said it has agreed to sell
most of the stake it holds in its Czech subsidiary to Czech
investment group PPF for 2.47 billion euros ($3.33 billion), a deal
that should help the Spanish telecom giant cut debt and refocus on
key markets such as Germany and Brazil.
In a statement, Telefonica said PPF will pay EUR2.06 billion for
a 65.9% stake in Czech Republic AS (BAATELEC.PR) as soon as the
deal is cleared by regulators. PPF will also pay an additional
EUR404 million over the following four years. During that period,
Telefonica will keep a 4.9% stake in the Czech company.
The move comes after months of speculation, on the back of
Telefonica's sale of its Irish operations in June for EUR850
million. Telefonica executives have said the company's priority
remains cutting debt to below EUR47 billion by the end of this
year, from EUR48.6 billion in July, to free up cash.
Telefonica said Tuesday the deal with PPF, by itself, will cut
the Spanish company's debt by around EUR2.69 billion.
The sale also comes as European Union authorities are pushing
down prices for telecommunication services, sharply reducing
roaming charges across the 28-nation bloc, in a bid to increase
competition.
Write to David Roman at david.roman@wsj.com Twitter:
@dromanber
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