Telefonica to close sale of O2 Ireland 'by end of June'
TELEFONICA expects to close the €780m sale of its O2 Ireland operations by the end of next month, the Spanish phone giant said yesterday.
Angel Vila, Telefonica's director of finance and corporate development, confirmed the sale of Ireland's second largest mobile network was proceeding as planned.
"We are expecting to close it in the second quarter," he said in a call with analysts.
The European Commission is due to give its decisions on a bid by 3 Ireland owner Hutchison Whampao for O2 Ireland by mid-June, as well as Telefonica's plan to merge its German unit with KPN's E-Plus.
Approval may be facilitated by Liberty Global's decision to have its local UPC division offer mobile-phone services in the country, people familiar with the plans said this week.
The sale will cut the level of debt at Telefonica to under €42m, it said.
The Spanish-based telecommunications firm reported a 14pc slide in first-quarter earnings as demand at home continued to fall and the Argentina and Chilean pesos declined.
Operating income was €3.93bn leaving out depreciation and amortisation, the Madrid-based carrier said. Sales fell 14pc to €12.2 bn.
Chief operating officer Jose Maria Alvarez-Pallete, who has been given greater executive responsibilities, faces a slowdown in the Latin American business, which makes up about half of the carrier's revenue. Telefonica Brasil also reported shrinking profit on higher marketing expenses this week.
"While the story of the company remains intact, they will likely suffer from foreign-exchange rate effects in the current quarter as well," said Andres Bolumburu, an analyst at Banco de Sabadell in Madrid.
Company shares fell 0.8pc to €11.95 yesterday morning in Madrid, paring the advance to 0.8pc this year.