Telefonica Considering Split of Submarine Cables From Telxius – Report
March 6, 2020
Telefonica is planning to split its submarine cables business from the rest of its infrastructure subsidiary Telxius, according to unnamed sources cited by Bloomberg and subsequently reported by El Economista. The company is in the process of discussing the move with advisers and investors, including 40 percent shareholder KKR and Pontegadea, the holding company of Zara founder Amancio Ortega, which owns a 10 percent stake. Separating its submarine cable assets from the rest of the Telxius infrastructure would allow Telxius to focus solely on mobile phone towers, said the report.
The cable business currently contributes around 60 percent of Telxius’ revenues and a spin-off could enable Telefonica and KKR to sell their large undersea infrastructure to potential stakeholders, added the report. In September the Spanish operator said it was planning to monetise its infrastructure assets and in November it announced the creation of a new unit called Telefonica Infra to hold the group’s shareholdings in communications towers and other telecommunications infrastructure vehicles, with its 50.01 percent stake in Telxius as the unit’s main asset.