Telekom Austria exchangeable bond launched as free float deadline looms

jueves 28 de julio de 2016 07:52 GYT

* America Movil must reduce 60 pct stake by September

* Telekom Austria shares fall 3.6 percent

VIENNA, July 28 (Reuters) - Citigroup said on Thursday it was launching a bond of up to 400 million euros ($443.8 million) exchangeable into shares of Telekom Austria, as a deadline approaches for parent America Movil to sell part of its stake in the Austrian company.

America Movil became the majority owner of Telekom Austria through a billion-dollar takeover offer in July 2014 that marked Mexican tycoon Carlos Slim's first successful venture into operating in Europe.

When America Movil took control of Telekom Austria, Slim agreed to increase the free float of the former state monopoly within two years.

Under the agreement, America Movil has to increase Telekom Austria's free float by the end of the year to 20 percent, from around 12 percent currently.

As a result, America Movil is expected to reduce its 59.7 percent stake in Telekom Austria by September this year to fulfil this agreement with Austria's state holding company, which owns 28.4 percent of Telekom Austria.

Shares in the Austrian company are currently below the price of 7.15 euros at which America Movil last acquired a stake in 2014.

Telekom Austria shares were 5.12 euros by 1048 GMT, down 3.6 percent, compared with a 0.8 percent fall in the European telecoms sector.   Continuación...