Tuesday, April 30, 2013

Telefónica Sells 40% Stake in Central American Operations

Telefónica will sell a 40% equity stake in its operations in El Salvador, Guatemala, Nicaragua, and Panama to Corporación Multi Inversiones (CMI) for US$500 million.

The deal also includes the payment of an additional amount of up to US$72 million based on the operational performance of the aforementioned assets in the coming years.  The implied multiple for the total amount of the transaction means 6.5 times EBITDA 2012 of the companies involved in the operation.

Telefónica said the deal increases its financial flexibility while allowing it to maintain operational control.  Telefónica is one of the leading brands in the region, with high levels of 2G and 3G coverage. The Company has maintained a long-term commitment in Central America with a sustained investment over the last years.