Telefonica Said to Add Banks for Debt-Cutting IPO of Telxius

  • CaixaBank, BBVA added as global coordinators for share sale
  • IPO could raise $5.6 billion as company looks to reduce debt

Telefonica SA added several banks for the initial public offering of its infrastructure division Telxius, which could raise 4 billion to 5 billion euros ($4.5 billion-$5.6 billion) as the parent moves ahead with debt-reduction plans following the blocked sale of its U.K. wireless unit, according to people with knowledge of the matter.

CaixaBank SA and Banco Bilbao Vizcaya Argentaria SA have been added as global coordinators, along with Goldman Sachs Group Inc. and JPMorgan Chase & Co., the people said, asking not to be identified because the deliberations are private. Telxius includes Telefonica’s wireless towers and network assets like submarine cables and planned data centers.

The share sale could take place as soon as July, said the people. Chief Executive Officer Jose Maria Alvarez-Pallete is looking to chip away at the company’s 50.2 billion-euro debt load after the 10.3 billion pound ($14.9 billion) sale of its U.K. O2 unit was blocked by European Union regulators this month.

Mediobanca SpA, BNP Paribas SA, HSBC Holdings Plc, Banco Santander SA, Citigroup Inc. and UBS Group AG will act as joint bookrunners for the IPO, the people said. Other banks have also been added as co-lead managers.

The carrier’s shares were down 0.8 percent to 9.11 euros at 4:29 p.m. in Madrid trading. The stock is down 11 percent this year.

A Telefonica representative declined to comment. Alvarez-Pallete said this month that the company is working on a Telxius IPO, but didn’t say when it would happen.

In February, Telefonica said it was analyzing strategic alternatives including the Telxius IPO. The Madrid-based phone operator, Spain’s largest, said at the time it will initially consist of about 15,000 phone towers and an international submarine-cable network covering 31,000 kilometers (19,000 miles), with more assets being included gradually over time.

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