Spanish telecom giant Telefonica (NYSE:TEF) inked a deal on Monday to sell a chunk of its close to 80% stake in its Czech subsidiary for about $3.3 billion.
The mobile phone operator said it is selling 65.9% of its stake in Telefonica Czech Republic, which includes its operations in Slovakia, to local investment group PPF Group.
It is maintaining an interest of just 4.9% and remaining as its industrial and commercial partner for the next four years. It may ultimately dispose of its remaining interest in the Czech unit.
The sale, valued at 2.47 billion euros, allows Telefonica to free up cash so that it can focus on growing its business in core markets. This follows other agreements reached in Ireland and Germany and builds on a series of initiatives that have enabled Telefonica to make strategic shifts focused on faster-growing core markets.
“This has been a decisive year for Telefonica’s transformation process, as it continues to successfully execute its strategy of increasing financial flexibility and strengthening the operations in its core markets," the company said in a statement.
Telefonica sold its Irish unit for $1.1 billion earlier this year and agreed in July to lower its share in Telefonica’s German unit to 65% from 77% as part of a broader $11 billion deal with KPN that created Germany’s largest mobile carrier ahead of Deutsche Telekom and Vodafone (NYSE:VOD).
The sale in Czech Republic is expected to reduce the company’s total debt by roughly 2.69 billion euros, enabling Telefonica to “meet its net financial debt guidance by year end.” The deal remains subject to regulatory approval.
Shares of Telefonica were down about 2% to $16.63 in recent trade.