Telefonica to sell Unicom stake for $1.4b

Spanish mobile carrier Telefonica has reduced its stake in China Unicom as a move to reduce debt.

 

The company has agreed to sell 1. 07 billion shares, or 4.56%, of its stake back to the Chinese operator’s parent, China United Network Communications Group Company Limited.

 

The price will be HK$10.21 ($1.30) per share, Unicom said in a statement issued on June 10.

 

The deal, which is subject to China’s regulatory approval and expected to be completed by end of July, will net Telefonica nearly HK$11 billion ($1.42 billion) , or € 1.13 billion.

 

Telefonica will remain the second-largest shareholder of the company with 5.01% of shares, while Unicom parent, China United will now hold 76.52% of the firm, up from 71.97%, the company said.

 

Telefonica chairman Cesar Alierta will retain a seat on the Unicom board, while Chang Xiaobing, chairman of China Unicom, will continue to be a director of Telefonica. 

 

Telefonica has promised not to sell any more Unicom shares for the next 12 months, China Unicom said.

 

Telefonica said the deal reflected its "decision to manage pro-actively its asset portfolio and will allow Telefonica to increase its financial flexibility, the operator said in a statement.

 

The Spanish operator said both “Telefonica and Unicom continue to be fully committed to their strategic alliance with a fruitful strategic cooperation between the two parties on different areas such as MNCs, international business, procurement, roaming and technology among others, while exploring new opportunities to work together in the digital world.”