Telefonica close to completing Telecom acquisition

30 Oct 2006

Telefonica has met most of the requirements needed for it to take control of state-owned Colombia Telecomunicaciones (Telecom), writes BNamericas citing state news agency SNE. According to the report, the largest remaining commitment, which must be fulfilled by 2 November, is for Telefónica to pay COP640 billion (USD289 million) into a retirement fund for Telecom employees. This transaction will mark the final step in the deal to gain control of the state-owned company.

In April this year Telefónica outbid Venezuela’s CANTV in an auction to buy a 50% stake in Telecom, with an offer of COP854 billion (USD367 million). In June the Spanish telco paid back a COP370 billion loan guarantee to the Finance Ministry a COP75 billion loan issued by the Treasury; the smaller loan was due to expire in December 2006. Telefonica still has to pay COP830 billion of Telecom’s long-term debt; the Spanish company is obliged to pay the debt between 2006 and 2022. The acquisition, which still awaits final approval from the country’s financial regulator, will see Telecom renamed Telecom-Telefónica.