The operator has agreed to sell a majority stake in the fibre business to investment firm KKR for around $200 million
Back in late 2019, Telefonica announced that it was slimming down its Latin American businesses, indicating that it would seek to sell off these assets (excluding those in Brazil), instead set to focus on its core markets of Spain, Brazil, Germany, and the UK.
Since then, the company has undergone numerous asset sales in different forms, with many such deals in recent months taking the form of joint ventures (JV) for fibre-to-the-home (FTTH) with new investors. In February, Telefonica spun off its Chilean fibre assets, with KKR taking a 60% in the new JV. Shortly afterwards, in Brazil, Telefonica again spun off its fibre network after selling 50% to Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ).
Now, it looks like Telefonica is set to repeat this pattern in Colombia, once again partnering with US firm KKR. KKR will take a 60% stake in the new business, with Telefonica holding on to the remaining 40%.
The business was valued at around $500 million, with Telefonica saying the deal would allow them to reduce their debt by around $200 million.
The business will begin its life with a FTTH network spanning around 1.2 million premises in 50 cities and municipalities, which it hopes to increase to 4.3 million across 90 cities within three years. Currently, fibre network currently has around 380,000 subscribers.
As always, the deal is subject to regulatory approval.
For Telefonica, the move is the latest in a long string of asset sales that are expected to continue over the rest of the year.
“The agreement with KKR will accelerate the deployment of fibre optic in Colombia at an unprecedented rate, in a market that has shown enormous potential in the last year,” said CEO of Telefónica Spanish-speaking Latin America, Alfonso Gómez Palacio. “In addition, fibre will create opportunities for thousands of homes and businesses that see digitalization as an opportunity for development. This is one more step by our company to lead FTTH services in Latin America.”
In related news, at the start of last month, Telefonica closed the sale of its Telxius tower business in Latin America to American Tower Corporation, for which it received around $900 million.
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