TelcoDepot Comments on Telefonica's Plan to Sell Its Czech Business for 2.47 Billion Euros

News blog has commented on recent news story about Telefonica which has reached an agreement to sell its Czech business to enable it focus on larger markets such as Brazil and Italy.


Chicago, IL -- (SBWIRE) -- 12/05/2013 -- Sequel to a recent news article by Julien Toyer published on November 5 on about Spain's largest telecom operator Telefonica which has reached an agreement to sell its Czech business in a deal valued at 2.47 billion euros ($3.3 billion), to help it reduce debt and focus on bigger markets in Italy and Brazil, comments on the business strategy of the firm.

The Reuters news story reported that on Tuesday in a statement to Spain's stock market watchdog, Telefonica declared it would sell a controlling 65.9 percent stake in the unit to investment group PPF, which belongs to the Czech Republic's wealthiest man Petr Kellner. Selling the Czech division which accounted for more than 3 percent of Telefonica’s profits is the recent in a string of disposals targeted at cutting debt below 47 billion euros by the end of the year.

“Selling a business unit to cut debt and focus on larger markets can help Telefonica regain its balance in the telecom market where it operates,” says lead researcher Josh Cole. “The firm can hire a third party business intelligence firm which can offer fresh insights on how to move its remaining business forward.”

Furthermore, the Reuters news story indicates that Telefonica is set to obtain 2.06 billion euros in cash when the deal is finalized, while the other 404 million euros will be paid over the next four years. On November 11, a 260 million euro dividend will also be paid to Telefonica by the Czech division. research team commended the business strategy of Telefonica describing it as a move the firm will benefit from in the long run. “If Telefonica have reason to invest in new markets it can hire experts that offer due diligence service to enable it make the right purchase to complement its business.”

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