Telefónica to increase ColTel capital by €1.37BN
Details
Juan Fernandez Gonzalez
| 31 August 2017

Telefónica Colombia’s shareholders have agreed to a capital increase of nearly €1,370 million.

The Colombian unit, ColTel, is 67.5% owned by Telefónica and 32.5% owned by the Colombian Government. In fact, the capital increase is designed to pre-pay the commitments related to PARAPAT, the consortium that owns the telecommunications assets and manages the pension funds of the former companies that resulted in ColTel.

According to the Spanish telco, this capitalisation will be assumed by ColTel’s partners in accordance with their equity stakes. Thus, Telefónica's capital injection into ColTel will amount to approximately €925 million.

Once the PARAPAT obligations are paid, the former contract with the consortium will be terminated, resulting in the transfer to Telefónica Colombia of all the property, rights and telecommunications assets.

“This operation strengthens the financial position of Telefónica Colombia, which, coupled with the investments made in recent years, allows the company to undertake a new phase,” said the company.

According to the Spanish telco, the execution of the capital increase won’t have a significant financial impact on the group, resulting in an increased consolidated net financial debt of around €40 million.