Outbound Call Center Featured Article

Spain's Telefonica to Raise Capital with Call Center Division IPO

By Tracey E. Schelmetic
TMCnet Contributor

Spanish broadband and telecommunications provider Telefonica SA (TEF) is reportedly looking to raise money. The Madrid-based company, which is Europe's second largest phone company and a provider in both Europe and Latin America, hopes to raise 745 million euros ($1.1 billion) by making an initial public offering of its call center division, called Atento Inversiones y Teleservicios SAU.

Telefonica (News - Alert) says it will be selling 33.7 million Atento shares, including the so-called over-allotment option, for a range of 19.25 euros to 25 euros each. At the middle point, Telefonica will raise 745 million euros, writes Bloomberg (News - Alert).

Chairman and Chief Executive Officer Cesar Alierta, who had tried to sell Atento as early as in 2007, is seeking to reduce debt and focus on Latin America to offset declining domestic market share. About 56.1 percent of Atento will be publicly tradable after the IPO, according to a document obtained by Bloomberg News.

Atento’s revenue rose 26 percent last year to 1.66 billion euros, with the largest part coming from Brazil, according to Telefonica’a annual report. Operating profit before depreciation and amortization increased 23 percent to 190 million euros.

Telefonica said yesterday it plans to cut 25 percent of its Spanish workforce over five years, instead of 20 percent of over three years under an earlier proposal. The phone company is betting on Latin America’s economic growth to win back investors discouraged by Spain’s unemployment rate, the highest in Europe. While revenue from Latin America rose 26 percent, its profit margin in the region slipped 0.5 percentage point to 36.2 percent in the first quarter.

The shares fell 0.7 percent to 16.57 euros at the 5:30 p.m. close of trading in Madrid. They have gained 9.8 percent in the past 12 months, giving the company a market value of 75.6 billion euros, reported Bloomberg.

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