Telefonica's Peru unit to enter bankruptcy proceedings (updated)
14/02/2025 21:40
(Updates throughout with details from Peru statement, comment
from parent company and antitrust watchdog, context from
reported Latin American asset sales, company background)
By Marco Aquino and Ana Cantero
LIMA, Feb 14 (Reuters) - Spanish telecommunications
giant Telefonica's TEF.MC Peru unit will file for bankruptcy
protection in the country, it said on Friday, amid a string of
asset sales around Latin America in recent years as the firm
looks to cut debt and invest in 5G.
The firm added that it has hired Kroll Advisory to assist in
the proceedings and will tap a member of the team to act as
Chief Restructuring Officer.
"The initiation of the restructuring process does not imply
liquidation, let alone bankruptcy," the company said in a
statement.
"Rather, it will allow the company to work with its
creditors and other stakeholders to continue to serve Peru,
protect its employees, strengthen its financial position and
ensure the sustainability of its business."
Separately, Telefonica said in a filing to the Spanish
stock market regulator that its Hispanoamerica unit had granted
a credit facility worth around 1.55 billion soles ($419 million)
to the Peru unit to meet its operational cash requirements.
"The financial situation of Telefonica del Peru has been
very negatively affected by tax contingencies that are more than
20 years old, as well as by administrative decisions which have
placed the company in a competitive disadvantage within a
particularly challenging market environment," it said.
"Telefonica reiterates that Telefonica del Peru's
liabilities are not guaranteed by any other company of the
Telefonica Group," it added, saying it would continue to
"explore strategic alternatives" regarding its Peru investment.
Peru's competition watchdog, meanwhile, said it had 90
working days to respond to the filing.
The announcements came the same day Spanish newspaper
Cinco Dias reported, citing unidentified financial sources, that
Telefonica TEF.MC had hired investment bank JPMorgan JPM.N
to sell its Mexican business
.
The newspaper said Telefonica was planning to sell the
unit before its annual shareholders' meeting, typically held in
April or May.
Local media have also reported that Telefonica has put
its Argentine business up for sale and the company has said it
is seeking to sell a majority stake in its
Colombian
unit to New York-listed Millicom TIGO.O .
Telefonica unexpectedly
replaced
CEO Jose Maria Alvarez-Pallete last month.
Elena Maestre, the CEO of Telefonica's Peru unit, said
in a statement the firm had decided to enter the proceedings
after evaluating various alternatives.
"We are focused, together with employees and suppliers,
on guaranteeing Telefonica del Peru's long-term permanence in
order to bring the best technology to our customers, while
meeting our regulatory commitments," she said.
($1 = 3.6990 soles)
(Reporting by Marco Aquino in Lima, Ana Cantero and Inti
Landauro in Madrid; Editing by Sarah Morland and David Gregorio)
((Kylie.Madry@thomsonreuters.com;))