Telefónica capitalizes the Hispam holding company with 1,200 million euros | Companies

During the first quarter of 2022, Telefónica carried out two capital increases in Telefónica Hispanoamérica, Hispam’s holding company, which encompasses most of its businesses in Latin America, with the exception of Brazil and Argentina, for a combined amount of 1,192 million euros.

The first of the increases took place in January and was for an amount of 392 million euros (19.6 million and an issue premium of 372 million), while the second, carried out in March, reached an amount of 800 million (40 million, with an issue premium of 760 million), as explained by the company in its annual financial report.

The company indicates that, at the end of 2021, it had a negative working capital of 4,316 million euros and, in terms of equity, it was in cause for dissolution. “However, on March 11, 2022, the company has renegotiated the maturity of its loans, among other conditions, and the sole shareholder has made two capital contributions for a total amount of 1,192 million euros, which have restored the balance heritage,” he says.

With the first of them, the company canceled some additional liabilities of 392 million euros, derived from the signing of some minutes in accordance with the closing of a tax inspection process, especially for the tax consideration of exchange differences generated by assets in Venezuelan bolivars, associated with accounts receivable between the company and the subsidiary in Venezuela.


In addition, last March, the holding company and Telefónica Finanzas signed a non-extinctive partial novation contract related to a goodwill contract, signed in 2020, for an amount of 2,953 million euros. Both parties set a new maturity, in May 2023, and a six-month Euribor variable interest rate plus 400 basis points. In the initial contract, the interest rate was six-month Euribor plus 315 basis points. In addition, they signed a second partial novation of another goodwill, for 1,400 million.

In 2021, among other movements, the company subscribed up to four capital increases in the Mexican subsidiary Pegaso PCS, with a joint disbursement of 551 million euros.

In turn, Telefónica Hispanoamérica carried out a write-down, as a result of the evaluation of the impairment of its holdings, for an amount of 1,088 million euros (942 million in 2020).

Among them, a value correction in the aforementioned Pegaso of 470 million (809 million in 2020), another of 631 million in Telefónica del Perú, and a last one of 20 million in Otecel de Ecuador.

In general terms, the value of long-term investments in group companies and associates amounts to 3,250 million euros, compared to 3,884 million the previous year. The report attributes a fair value of 5,836 million. The holding company received dividends from its subsidiaries for 46 million euros in 2021, of which 31 million came from Telefónica Móviles Uruguay.

The holding company repatriated funds for 146 million

Among other movements, during 2021, Telefónica Hispanoamérica repatriated funds to Spain for an amount greater than 146 million euros, considered not necessary to undertake new profitable development opportunities in the region.

As explained by the holding company in its financial report, the measure is part of one of the operator’s lines of action to mitigate country risk, together with the partial compensation of assets with liabilities, not guaranteed by the parent company in Latin American subsidiaries. In this way, an eventual loss of assets would be accompanied by a reduction in liabilities. The teleco has applied this strategy in recent years to reduce the impact of changes in exchange rates.


Leave a Comment

Your email address will not be published.