January 22, 2019 / 6:53 PM / a year ago

Telefonica in talks to sell Central America operation

MADRID, Jan 22 (Reuters) - Spain’s Telefonica is negotiating the sale of its relatively small Central American operation in a move that should allow the company to focus on core regions and reduce its large debt, it said on Tuesday.

A potential deal, on which no agreement has been reached so far, could encompass all or some of the company’s assets in the region, which groups operations in Costa Rica, El Salvador, Guatemala, Nicaragua and Panama.

Telefonica, which had approaching 43 billion euros ($48.9 billion) of debt at the end of September, declined to name the potential buyer.

Spanish newspaper Expansion earlier reported that Telefonica was in talks with Mexico’s America Movil over the sale of its El Salvador and Guatemala businesses.

The sale is small within the context of Telefonica’s size and the disposal of assets that are not important to the group makes sense, Deutsche Bank analysts said in a note.

The Central American unit accounted for 4.6 per cent of Telefonica’s group operating income for the first nine months of last year. ($1 = 0.8797 euros) (Reporting by Andres Gonzalez Editing by Andrei Khalip and David Goodman)

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