Spanish telecom company Telefonica has finally confirmed that it has agreed to sell its Peruvian unit, Telefonica del Peru, which recently filed for bankruptcy protection. It will be sold to Argentina’s Integra Tec International for about EUR900,000 euros (about US$1.02 million).
Though there appears to be little specific information about the new shareholder, Telefonica says Integra Tec International has extensive experience in Latin America, in the telecommunications, public services, media, energy, chemistry and natural resources industries, as well as in the recovery of companies in financial difficulties and special situations.
Telefonica adds that the objectives of the new shareholder are the maintenance and expansion of the service, the restructuring of the company’s debt within the framework of the bankruptcy process and the establishment of a sustainable business plan with a solid capital structure.
It adds that Integra Tec intends to work amicably with creditors, suppliers, workers, the Government of Peru and all parties related to Telefonica del Peru. The deal, says Telefonica, will ensure the continuity of telecommunications services for more than 13 million customers in urban and rural areas of Peru.
Telefonica del Peru, which was 99.3% owned by the Spanish company, said it ran into trouble following tax disputes and administrative decisions that put it « in competitive disadvantage », despite being the largest telecom company in the South American country.
As part of the deal, Integra Tec will assume the EUR1.24 billion (about US$1.4 billion) debt that Telefonica’s Peruvian unit owes the local tax agency and bond holders. Integra Tec has also committed to buying the 0.7% of Telefonica del Peru shares held by minority shareholders.
Reuters reports that Telefonica had bought the former state-owned Peruvian telecom monopoly in 1994 for about US$2 billion.
The transaction apparently also involves the indirect transfer of control over the shares that Telefonica del Peru holds in the rural operator Internet para Todos.