The Argentine telecom operator Telecom Argentina SA is selling bonds maturing in 2033 in order to finance the acquisition of the Argentine business of the Spanish Telefonica SA for $1.25 billion. This is reported by foreign media.
The funds raised as a result of the bond sale will be used to pay for part of the loan in the amount of $1.17 billion under the deal with Telefonica SA.
Telecom Argentina, which has a market capitalization of $5.92 billion, financed the deal with a syndicated loan from Banco Bilbao Vizcaya Argentaria SA, Deutsche Bank AG, Banco Santander SA, as well as a bilateral loan from the local branch of Commercial Bank of China SAU.
The deal provoked resistance from the Argentine government, which demanded that Telecom refrain for up to six months from any legal, corporate or commercial actions aimed at consolidating with Telefonica.
From the government's point of view, as a result of the deal, 70% of the country's telecommunications market falls under the control of one company, which may lead to a significant restructuring of market dynamics.
Telecom Argentina has engaged Deutsche Bank Securities Inc., Banco Bilbao Vizcaya Argentaria SA, Citigroup Inc. JPMorgan Chase & Co. and Banco Santander SA as organizers of the bond sale.
Telefonica sold the Argentine business after 30 years of operating in Argentina amid high inflation, the country's weak economy and in line with the strategy adopted in 2019 to reduce its presence in Latin America. Telefonica also plans to sell units in Mexico, Colombia and Uruguay.
Telefonica's departure from Argentina followed a broader wave of asset sales by multinational companies including Exxon Mobil Corp., HSBC Holdings Plc and Mercedes-Benz Group AG amid concerns about the results of economic reform by H. Miley.
Telefonica is a Spanish telecommunications company with headquarters in Madrid (Spain).
Telecom Argentina is a telecommunications company providing fixed-line telephone and Internet access services. The company owns the Personal and Arnet brands. The headquarters is located in Buenos Aires (Argentina). The company's shareholders are the Argentine government (10%), CriteriaCaixa SA (9.9%) and Grupo Clarin.
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