Spanish telecommunications firm Telefonica is ready to sell its $3.6 billion stake in Telefonica Czech Republic, according to three bankers closely following the company.
According to Reuters, the Czech Republic unit has long been on the cards as a potential asset Telefonica could sell off to reduce debt levels.
Telefonica currently holds 69.41 percent of the unit, which has an overall market value of roughly $5.2 billion. Bloomberg reports that Goldman Sachs and Societe Generale are helping Telefonica to find a buyer for its 69 percent holding, which equates to a market value of over $3.6 billion.
Telefonica said "there is no certainty over whether an accord will be reached."
The telecommunications firm, led by Cesar Alierta, intends to cut its debt to under 47 billion euros ($64 billion) by the end of 2013. Telefonica has net debt of about 48.6 billion euros, a sizeable debt that the company is looking to reduce over the next few years. The company reported Q2 revenues of 14.4 billion euros, down by 6.8 per cent year on year, while net income fell by 13.1 per cent to €1.15bn.
Recently, the firm agreed to sell its Irish business for approximate 850 million euros.
This month, KPN shareholdersbetween E-Plus and Telefonica's German O2 brand, which at a price of 8.55 billion euros, would create one of Germany's largest mobile networks.
Two anonymous sources told the news agency that Czech investment group PPF was a likely buyer -- later confirmed by Bloomberg -- whereas a private equity fund could be another option. One of the sources said Russian telecoms groups may express interest, but could face political opposition to a potential buyout.
Things may not be so bright in the Czech Republic, but in Italy, Telefonica hasin Italy's biggest telecoms provider, Telecom Italia -- announcing in September a deal to increase its share in holding company Telco to 66 percent. Telco owns just over 20 percent of Telecom Italia, and as the Italian branch currently has roughly €29bn in debt, takeover rumors continue to surface.