Telefónica has sold 60% of its fiber optic network in Chile to the KKR investment fund for 400 million euros, through a new company (InfraCo), which will be in charge of operating and deploying it in the Andean country and the that the subsidiary Telefónica Chile will keep the remaining 40%, according to the statement sent to the stock market authorities.
The operator values the transaction of 100% of InfraCo at 1,000 million dollars (about 800 million euros), and adds that it will reduce its financial debt by approximately 400 million euros.
KKR is already a Telefónica partner in Telxius, the operator’s infrastructure subsidiary, of which it owns 40%, although the sale of its main asset – the mobile phone towers – to American Tower for 7,700 million euros has already been announced. euros. KKR is also one of the reference shareholders of MásMóvil after the bid launched in 2020 together with Cinven and Providence.
“KKR is an investor with great experience in fiber optic wholesale business platforms in other countries, thus complementing Telefónica’s own experience in fiber deployment and operation in the different countries where it is present,” the operator said.
The operator explains that Telefónica’s fiber network in Chile will be transferred to InfraCo, which will begin operations with two million homes and offices (real estate units) to reach 3.5 million units in 2023. Telefónica explained that InfraCo is ready to operate and accelerate local fiber optic network deployments throughout Chile, and offer wholesale access for the FTTH business to all telecommunications service providers and these, in turn, offer services to their end customers. The transaction will be submitted to the competition authorities for consideration and its closing is expected to take place in the first half of 2021.
Laura Abasolo, general director of Finance and Control at Telefónica, ensures that “the transaction meets the group’s objectives, which are to accelerate the deployment of networks through an efficient capital structure, and crystallize the value of the assets.” According to the executive, Telefónica can monetize part of these assets, helping to reduce its debt, and complying with the strategy of developing new models that allow exposure to Latin America to be modulated.
Favorable judgment in Peru
On the other hand, the Spanish telecommunications multinational will avoid paying 729 million soles (about 165 million euros) to the Peruvian treasury thanks to a ruling that recognized an excess of interest collection on a tax debt.
The ruling of the Constitutional Court of Peru annulled part of the interests claimed from Telefónica, considering that the administrative authority in charge of evaluating the challenge presented by the company exceeded the reasonable period of time to resolve the case, which markedly increased the interest on the debt. If the debt was 582 million soles (130 million euros) for the income tax of the years 2000 and 2001, the excessive time spent in the litigation added another 1,581 million soles (355 million euros) in interest .