Spanish telephone company to sell the shares of China Unicom
Spanish telephone companies (Telefónica,) have reached an agreement that will be held nearly half of the sale of the shares of China Unicom (China Unicom) to China Unicom’s parent company, China United Telecommunications Corporation (China United Network), the price of 1.1 billion euros. The Spanish group is busy to strengthen its balance sheet in order to deal with the difficult environment in Europe.
This debt-laden Spanish group said that the sale of its holdings of China’s second largest mobile operators 4.6% of the shares, giving it a greater financial flexibility.
The company also cut the cash portion of the 2012 dividend, designed to prevent credit rating was lowered further. Last month, Standard & Poor’s (Standard & Poor’s) downgraded its credit rating. The company said it will consider other asset sale program and is ready to arrange the part of German business listing.
Spanish telephone company, said the price of 10.21 Hong Kong dollars per share, it will sell the above-mentioned China Unicom shares, a total of 10.963 billion Hong Kong dollars, while retaining the remaining 5% of the shares, the Group Chief Executive Officer Cesar Alierta (César Alierta ) will remain as directors of China Unicom. The company has agreed to implement a 12-month “lock” program, during this period shall not sell the remaining shares.
Analysts said Citigroup (the Citi), the management is debt reduction placed on top of investing in this investment, the company held by a small minority stake, it seems doubtful that its influence and strategic benefits “.
Spanish telephone company to buy the shares of China Unicom in 2005 large-scale acquisition wave, overweight nearly doubled in 2011, but analysts said the Spanish telephone company has been difficult about China Unicom.
Others questioned the wisdom of reducing its stake in a fast-growing market. Citigroup said the sale proceeds for nearly one fifth lower than the valuation of these shares. Spanish telephone company’s shares rose 2.4 percent to 10.02 euros.
Spanish telephone company, said it is committed to maintaining a strategic alliance with Chinese operators, and to explore new opportunities. China Unicom chairman Chang Xiaobing, still served as director of the Spanish telephone company.
Upon completion of the transaction, China United Telecommunications Co., Ltd. will hold 76.5% of the issued share capital of China Unicom. The deal could be completed by the end of July.
The Spanish telephone company liabilities of more than 57 billion euros of its debt reduction measures, including an initial public offering (IPO) on the part of German business and operations may be merged with the Dutch operator KPN, may Latin American business listing, or sell.
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