Telefonica has announced an agreement to sell its mobile telecommunications assets in El Salvador to UK-based investment fund General International Telecom Limited for a total of USD 144 million (EUR 125 million), a multiple of around 7 times the unit’s 2020 OIBDA. In a brief statement to Spain’s financial markets regulator CNMV, Telefonica said it currently owns 60 percent of Movistar El Salvador, with the remaining 40 percent in the hands of Corporacion Multi Inversiones (CMI), meaning it will earn a total of around EUR 75 million from the transaction.
Telefonica reached an agreement to sell its El Salvador assets to America Movil for around EUR 277 million back in January 2019 but the latter was forced to pull out of the deal in September 2020 due to strict anti-trust conditions imposed by the country’s competition watchdog. The Spanish operator has been looking for alternative buyers for the asset ever since, finally reaching an agreement with General International Telecom Limited for less than half of the amount of the previous deal. It added that the closing of the transaction is subject to certain closing conditions, including the relevant regulatory approvals.
Telefonica recently completed the sale of its mobile operation in Costa Rica to Liberty Latin America (LLA) for USD 500 million as part of a restructuring plan to modulate its exposure to Latin America and focus on its core markets of Spain, the UK, Germany and Brazil.
The group's Hispam unit (comprising all of its remaining Latin American subsidiaries with the exception of Brazil) posted a 3.2 percent year on year rise in service revenues to just over EUR 2 billion in the second quarter.
