Telefonica plotting 02, Telxius IPOs

Telefonica has begun preparing for an initial public offering of its UK mobile telecommunications unit, O2, among other options under review, as it seeks to cut debt.

In a filing with the Spanish stockmarket regulator, the CNMV, Madrid-based Telefonica said it would retain a majority stake in O2 under all the options under consideration.

With roughly €52.6bn in debt, and after the European Commission blocked a sale CK Hutchison Holdings Ltd, the Spanish telecoms incumbent had come under increased pressure to reduce its gearing.

Planning was also underway to float its telecommunications infrastructure unit Telxius in the backhalf of 2016, the company said in a separate statement.

At the interim stage, the company had reported that gearing in terms of operating income before depreciation and amortisation stood at 3.2 times its net debt.

Telefonica chief Jose Maria Alvarez-Pallete is on record as having said his aim was to cut the company´s oibda-to-net debt ratio to 2.35 by end-2017, while maintaining its dividend at €0.75 per share, according to Europa Press.

As of 0951 BST shares in Telefonica were trading 1.84% higher at €9.346.