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Telefonica Awakens to Debt Concern With Unicom Stake Sale

Telefonica SA’s decision to sell half of its stake in China Unicom (Hong Kong) Ltd., paring its seven-year venture into one of the fastest-growing wireless markets, shows the burden of debt on the Spanish operator.

The sale of 1.07 billion China Unicom shares for HK$11 billion ($1.4 billion) will cut Telefonica’s holding in China’s second-largest mobile-phone operator to 5 percent, the companies said yesterday. The HK$10.21-per-share deal values the stake at 22 percent less than its carrying value on Telefonica’s accounts. Madrid-based Telefonica agreed not to sell any further China Unicom shares for 12 months.