Telefónica completed its departure from Central America with the sale of its mobile partnership in El Salvador to General International Telecom Limited by 144 million dollars, approximately 125 million euros.
This new operation is carried out from Telefónica Central America Inversiones, S.L., a 60% participated company by Telefónica and 40% by Multi Investment Corporation.
On the buyer’s side, the transaction has been structured by affiliates of the Atlantis Group, financial entities that financially support the acquisition by a group of Salvadoran investors with assets in that country.
60% of 125 million euros are encrypted for telephone at 75 million euros.
In its withdrawal from Central America, Telefónica has propped up 455 million euros in Costa Rica (the only subsidiary where it aglutinated 100% of the shares), some 750 million in Nicaragua, Panama and Guatemala, and 75 million in El Salvador (in all these
Countries had 60%)
Telefónica Salvadoran affiliate had been sold initially to América Móvil, a group controlled by the Mexican magnate Carlos Slim, but “After the imposition of harsh regulatory conditions, the operation was aborted,” he recalls telephone about that failed operation.
Specifically, the country’s sectoral regulator conditioned the sale to the refund of spectrum packages by Mobile America, a requirement that ended up discouraging Slim.
Telefónica had already been disposed of its subsidiaries in Guatemala, Nicaragua and Panama, for a joint price of 1,356 million dollars (1,163 million euros), of which 60% corresponded to Telefónica and therefore 814 million dollars (somewhat less
of 750 million euros).
However, Millicom International Cellular refused to execute the purchase of the subsidiary of Costa Rica that had agreed with the Spanish multinational.
Faced with this scenario, a Judicialized, Telefónica had to find another buyer, Liberty Latin America, who paid a final price of 500 million dollars that in its entirety were for Telefónica (approximately 455 million euros).
If the operation has been materialized initially with Millicom for Costa Rica, the price of that transaction would have exceeded 500 million euros.
With this last sale in El Salvador, the Spanish telecommunications company leaves behind once and for all Central America.
In Costa Rica, 455 million euros was supported instead of the initial 500 million, while El Salvador will finally report another 75 million, according to his 60% participation, instead of the 166 million expected.
With respect to operations that did not come down, Telefónica has seen its forecasts are lowered by around 140 million euros.
These new 125 million euros represent a multiple of 7 times the OIBDA (similar to EBITDA) that the Salvadoran participant managed to score in 2020. For Telefónica that multiple, more often fulfills any expectation, understanding that the consensus of analysts gave
Good even the multiple of 4 for Hispanoamérica, having exceeded that data with more and also in Central America, where the ratings tend down.
In the company they are satisfied with the operation, more if possible after having suffered a pandemic that has altered the assessments to the downside.
One of the Mantras of Telefónica is to reduce risks and of course in the countries where it has disinverted.
Once again, the company chaired by José María Álvarez-Pallete has framed the operation “within the Asset Portfolio Management Policy of the Telefónica Group, based on a value-creation and optimization strategy of return on capital”.
Currently, Telefónica focus its business mainly in four markets, as has recognized Álvarez-Pallete: Spain, Brazil, Germany and the United Kingdom, where the teleco has carried out a great merger to lead the mobile market by integrating its subsidiary O2 with
Virgin, thanks to an agreement with Liberty Global.
