Spain’s ailing telecom giant, Telefonica (News - Alert) SA (TEF), is in the process of selling assets in an effort to cut more than $75 billion of the company’s net debt. To help do so, Telefonica SA has reportedly agreed to sell its Atento call center division to Bain Capital Partners LLC.
The transaction gives Atento an enterprise value, which includes debt, of 1.04 billion Euros, Madrid-based Telefonica said in a statement today. Atento had 175 million Euros of net debt at the end of June.
Bain Capital was cofounded by 2012 presidential candidate and former Massachusetts governor, Mitt Romney.
Bloomberg (News - Alert) is reporting today that chief executive officer Cesar Alierta is selling assets, including shares in Telefonica’s German and Latin American businesses, as he seeks to avert a potential debt-rating cut. Telefonica had tried to sell Atento as early as in 2007, and a year ago shelved plans for an initial public offering of the unit, which employs more than 152,000 employees – almost half of the company’s total.
The deal has been done at a better price than the market expected,” Nuno Matias, an analyst at Espirito Santo in Lisbon, said by phone. “The company really needs to carry out further transactions such as the IPO in Germany in order to deleverage.”
Created in 1924 as Compañía Telefónica Nacional de España (CTNE), until the liberalization of the telecom market in 1997, Telefónica was the only telephone operator in Spain and still holds a dominant position (over 75 percent in 2004).
Since 1997, the Spanish government has privatized its interest in the company.