Telefonica to float German unit, modifies dividend

Date: Thursday 31 May 2012

Spanish telecom giant Telefonica announced that it has decided to prepare for the flotation of its subsidiary O2 Germany.

It is also considering posssible listings in Latin American and asset sales in order to accelerate the divestment of non-strategic assets.

Telefonica's Board met on Wednesday and decided that it would pay out a 2012 dividend of €1.50, with a payout of €1.30 and a share buyback of €0.20 per share to be carried out before May 2013. The repurchased shares will consequently be amortised.

Given that most shareholders decided to receive new shares in the recent scrip dividend, the €1.30 dividend will be realised through a cash dividend of €0.40 per share on November 2012 and €0.90 in the form of a scrip dividend or a share buy-back in May 2013, explained Telefonica.

In spite of the divestments and changes to its dividend policy, Telefonica assured that it will match its remuneration targets in 2013 for a total payout of €1.50 per share. The manner in which the 2013 dividend will be paid out will be decided as per market conditions and investor preferences at the time, the company explained.

The operator argued that it is committed to increasing financial flexibility and lowering its net debt to OIBDA (operating income before depreciation and amortisation) ratio to less than 2.35 this year while maintaining an attractive shareholder remuneration.

MG

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