Brexit forces Telefónica to consider delaying O2 IPO

27 Jun 2016

Market uncertainty because of Brexit has forced Spanish telecoms giant Telefónica to mull delaying at least two IPOs

Spanish telecoms giant Telefónica may delay the IPO of its UK wireless unit O2 because of fears of market volatility following the UK’s Brexit decision.

Madrid-based Telefónica was also planning to announce the IPO of its infrastructure unit Telxius next week to raise $1.6bn.

However, Telefónica may delay this by a week in the hopes the markets will stabilise.

The shock Brexit result on Friday, in which 51.9pc of British people voted to leave the EU, sent the global markets into meltdown, with an estimated $2 trillion wiped from the markets and the British Pound slumping to its lowest level since 1985.

Telefónica itself saw its stock fall 16pc, its worst drop in 17 years according to Bloomberg.

Telefónica had originally tried to sell its O2 unit to Hutchison, owners of Three, for $14.1bn, but this was blocked by EU regulators in May.

The Spanish telecoms giant needs to raise money through an IPO or sell off the unit in order to write down its €52.2bn in total debt.

The O2 in London image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years