The German wing of Telefonica SA, the Madrid-based Spanish multinational telecommunication company, primarily engaged in providing fixed and mobile connections, broadband internets alongside subscription-based television services, had recently cut a €1.5 deal with the Spanish telco operator Telxius Telecom SA, owned by the Pontel Participaciones, SL, that involved a sell-off of all of its German cell phone towers, as the Spanish telecom industry tycoon seemed to be muscling up liquidities in preparation for potential investments on the ‘Gen Z’ fifth-generation networks.
Aside from that, the German wing of Spanish telecom operator Telefonica SA, one of the largest telecommunication companies in the world operating in Europe and America, had also told in a regulatory filing with the Spanish bourse on Monday that under the financial terms of the accord, Telefonica Deutschland would sell over 10,100 cell phone towers in Germany to Telxius Telecom for €1.5 billion.
€1.5 billion cell phone mast sale to trim Telefonica debt by €500 million
Apart from that, the Spanish telecommunication industry titan, Telefonica SA had also added in the security filing with the Spanish bourse that the Telxius would finance 90 per cent of the deal from its own resources alongside a capital raise program proportionally distributed among its current stakeholders according to their percentage of holdings in the company, and the remaining 10 per cent would be funded by debts.
More importantly, while the Madrid-based Telefonica SA had also added that as a consequential upshot of the deal, Telefonica’s net debt would be slashed by €500 million between 2020 and 2021, in justification of the sales of Telefonica’s German phone masts, Chief Executive of Telefonica Deutschland, Markus Haas, was quoted saying earlier that the company was witnessing “an extremely high demand” for the cell phone towers of Telefonica Deutschland and the valuations were higher enough to justify the sales.