Argentina Telephone Subsidiary Sale Impact: -$1.107B
- MADRID, Spain – Telefónica's sale of its Argentine subsidiary to Telecom Argentina, finalized on Feb.24,is expected to negatively impact the company's first-quarter earnings by 1.107 billion euros.
- According to a company document published last week with the National Securities Market Commission (CNMV), "The accounting value of the net assets of Telefónica Móviles Argentina as of...
- The sale to Telecom Argentina,a company with significant participation from the Clarín Group and the Fintech fund of Mexican businessman David Martínez,was for $1.245 billion (approximately 1.189 billion...
Telefónica Sale in Argentina to Impact Q1 Earnings; CEO to Testify Before Congress
MADRID, Spain – Telefónica’s sale of its Argentine subsidiary to Telecom Argentina, finalized on Feb.24,is expected to negatively impact the company’s first-quarter earnings by 1.107 billion euros. The loss, stemming from the reclassification of accumulated negative conversion differences of the Argentine peso, will be reflected in the Q1 results, slated for release on May 14. However, the company stated the impact will be non-cash.
Financial Details of the Argentina Deal
According to a company document published last week with the National Securities Market Commission (CNMV), “The accounting value of the net assets of Telefónica Móviles Argentina as of December 31, 2024 amounts to 1,175 million euros. As a consequence of the transaction, the group will reclassify the results of 2025 the negative conversion differences accumulated corresponding to Argentine Telefónica Argentina, which as of December 31, 2024 amounted to 1,107 million euros.”
The sale to Telecom Argentina,a company with significant participation from the Clarín Group and the Fintech fund of Mexican businessman David Martínez,was for $1.245 billion (approximately 1.189 billion euros). The deal closed on Feb. 24 with the funds received by Telefónica.
Argentine Government Intervention
While the Argentine government initially moved to block the sale, this action does not affect Telefónica’s interests. Unlike regulations in Spain and the European Union, Argentine law does not allow for conditions to be imposed on the seller before authorizing such a transaction.
Other Divestments in Colombia and Peru
The impact of two other divestments by Telefónica through its Hispam subsidiary remains to be seen. On March 13, Telefónica reached an agreement with Millicom to sell 67.5% of its subsidiary Colombia telecomunicaciones (COLTEL) for $400 million (around 368 million euros). This deal is pending regulatory approval.
Additionally, on April 13, Telefónica sold its subsidiary in Peru, which is in creditors, to the Argentine company Integra Tec International for 3.7 million Peruvian soles (approximately 900,000 euros). The deal includes the assumption of debt amounting to 1.240 billion euros at the end of 2024.
The Peruvian operation,signed and closed on April 13,will have its associated losses reflected in the company’s financial results for the first half of 2025.
CEO Murtra to Appear Before Congress
Separately, Telefónica’s president, Marc Murtra, is scheduled to appear before the Mixed National Security Commission in Congress on Monday. The appearance,requested by the PP party,is to address the general direction of his management in matters of national security. the government has cited national security concerns, along with economic and industrial interests, as justification for the State’s return to the company’s shareholders through the SEPI’s purchase of 10% of Telefónica’s shares.
Murtra’s appearance was originally scheduled for March 13, alongside Indra’s president, Ángel Escribano.Though,Murtra requested a postponement. His advisors informed Edurne Uriarte, the commission president, that Murtra, who assumed his role on Jan. 18, preferred to appear closer to the summer, allowing him to further develop the new strategic plan he intends to present in the second half of the year.
TelefónicaS Strategic Shifts: Argentina Sale, CEO Testimony, and Financial impacts
This article explores the recent activities of Telefónica, focusing on its financial performance with the sale of its Argentine subsidiary, its divestments in Latin America, and the upcoming Congressional testimony of its CEO.
What is the impact of Telefónica’s sale of its Argentine subsidiary?
The sale of Telefónica Móviles Argentina to Telecom Argentina, finalized on February 24, is expected to negatively impact Telefónica’s frist-quarter earnings. A loss of 1.107 billion euros is anticipated due to the reclassification of accumulated negative conversion differences related to the Argentine peso. The company has stated that the impact will be non-cash.
When will the impact of the sale be reflected in Telefónica’s earnings?
The financial impact of the sale will be reflected in Telefónica’s Q1 results, slated for release on May 14.
How much was the sale of Telefónica Móviles Argentina for?
The sale price of the Argentine subsidiary was $1.245 billion,equivalent to approximately 1.189 billion euros. The deal was completed on February 24.
Who acquired Telefónica’s Argentine subsidiary?
Telecom Argentina, a company with meaningful participation from the Clarín Group and the Fintech fund of david Martínez, acquired telefónica’s Argentine subsidiary.
Did the Argentine government attempt to block the sale?
Yes, the Argentine government initially moved to block the sale. However, unlike regulations in Spain and the european Union, Argentine law does not allow for conditions to be imposed on the seller before such a transaction can be authorized. Therefore, this has now effect on Telefonica.
what other divestments has Telefónica made recently?
Telefónica has also made the following divestments:
Colombia: Reached an agreement with Millicom to sell 67.5% of its subsidiary Colombia telecomunicaciones (COLTEL) for $400 million (around 368 million euros) on March 13. This deal is pending regulatory approval.
Peru: Sold its subsidiary in Peru to the Argentine company Integra Tec international on April 13 for 3.7 million Peruvian soles (approximately 900,000 euros).The deal includes the assumption of 1.240 billion euros in debt at the end of 2024.
What is the financial impact of the peru divestment?
The Peruvian operation, which was signed and closed on April 13, will have its associated losses reflected in Telefónica’s financial results for the first half of 2025.
What is the role of Telefónica’s Hispam subsidiary in these divestments?
The divestments in Colombia and Peru were carried out through Telefónica’s Hispam subsidiary.
why is Telefónica’s CEO, Marc Murtra, appearing before Congress?
Telefónica’s president, Marc Murtra, is scheduled to appear before the Mixed National Security Commission in Congress.The appearance, requested by the PP party, is to address the general direction of his management in matters of national security. The government has cited national security concerns, along with economic and industrial interests, as justification for the State’s return to the company’s shareholders through the SEPI’s purchase of 10% of Telefónica’s shares.
When will Marc Murtra appear before the Mixed National Security Commission in Congress?
The source material indicates that the appearance will happen on Monday.
Why was the original date for Marc Murtra’s appearance postponed?
Murtra’s advisors informed the commission president that Murtra, who assumed his role on January 18, preferred to appear closer to the summer, allowing him to further develop the new strategic plan he intends to present in the second half of the year.