Telefonica issues 2-bln-euro bonds after IPO flop

Telefonica said on Monday that it had issued bonds worth €2 billion ($2.2 billion), less than two weeks after the debt-burdened Spanish telecoms giant cancelled the listing of its subsidiary Telxius over weak investor demand.

Telefonica issues 2-bln-euro bonds after IPO flop

In a statement, the group said some of the bonds – worth  a total of €1.25 billion – would mature in 2020, and the rest in 2031.

Felipe Lopez-Galvez, an analyst at Spain's Self Bank, said the debt issuance would “compensate the lack of cash coming in” after the failed listing of Telxius, a subsidiary that manages Telefonica's infrastructure

The company had hoped to raise up to €1.5 billion from the listing, which was scheduled for October 3. It had planned to float up to 40 percent of Telxius.

Shares in the company rose 1.18 percent to €8.80 on Monday on news of the debt issuance.

Telefonica, one of the world's biggest telecoms groups, had a debt pile of €52.57 billion at the end of June.

As such, it is on the hunt for cash and it is also considering a possible listing of its British unit O2, after the European Commission blocked its sale to Hong Kong group Hutchison Whampoa over fears of the impact on prices for consumers.

The group reported a net profit of €1.24 billion in the first half of 2016 – a 42.1-percent drop from the same time last year – due in part to currency fluctuations.

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There are still 16,000 public telephones in Spain

Spain has a law to provide at least one payphone for every 3,000 inhabitants, even though an average of one call a day is made from them.

There are still 16,000 public telephones in Spain
Photo: pawpopa3336/Depositphotos

New data reveals that Spain currently has over 16,000 public payphone dotted around the length of breadth of Spain even though an average of one call a day is made from them.

Telefonica sources cited by news agency Efe revealed that Spain's biggest telecommunications company currently spends €4.52 million a year maintaining the phone booths.

Despite the fact that they are rarely used, Telefonica is tied to a “universal service obligation” imposed by the government to provide and maintain in working order a public payphone for every 3,000 inhabitants in each town of 1,000 or more and one cabin in all municipalities of less than 1,000 inhabitants.

The company estimates that of the 16,000 currently in use, half are almost never used and 12,000 ceased to be profitable years ago, losing the company some €3 million  a year.

The number of payphones has been vastly reduced since the  introduction of mobile phones. Twenty years ago there were almost four times as many payphones across Spain  –  55,000 payphones available in 1999 – and you could expect to find one on many a street corner.

Spain's communications regulator CNMC has called on the government to drop the universal service obligation for public payphones after a recent survey found that nearly 9 in 10 Spaniards (88 percent) admitted to never having used a public payphone in their life.

When was the last time you used one?

READ ALSO: Could technology be killing off Spain's sociable mealtimes?