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The Saudi STC, the exit plan and the possible entry of SEPI will mark Telefónica's 'Investor's Day'

MADRID, 5 Nov.

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The Saudi STC, the exit plan and the possible entry of SEPI will mark Telefónica's 'Investor's Day'


Telefónica will celebrate its 'Investor's Day' on November 8, a date on which it will also present its results until September and an event that will be marked by some of the major issues that mark the company's current affairs, specifically, the plan of incentivized exits that the company is preparing, the landing of the Saudi group STC in its capital and the possibility of the Government entering the company along with other national investors.

However, the company conceives the day so that the 'highlight' of the meeting is the presentation of Telefónica's strategic plan for 2023-2026, a document in which the operator is also expected to clarify the future of, for example, its technological subsidiary, valued at around 2,000 million euros.

Although the new incentivized exit plan has not yet been presented to the unions, which will be done after November 8, the measure will not appear as such on 'Investor Day', although it will be linked to the figures of cost adjustments to be presented.

The company's idea is to establish a sick leave plan for a maximum of 5,000 workers, although it is estimated that between 2,500 and 3,000 people will be included, a figure similar to that of 2021, the last time a recall was carried out. measurement of this caliber.

The operator will provision more than 1,000 million euros to accommodate this exit plan, a figure to which around 200 million euros would be added linked to a voluntary resignation plan for the corporate area, that is, employees in the business environment. team of the president of Telefónica, José María Álvarez-Pallete, and also managers of subsidiaries, among others.

The adjustment plan for the corporate area, which would include directors, managers and managers, is discretionary in nature, could affect a minimum of 300 people and seeks to slim down an oversized management team, according to what sources familiar with the situation informed Europa Press.

Another of the issues that will fly over the celebration of Telefónica's 'Investor's Day' has to do with the possibility of SEPI - an organization dependent on the Ministry of Finance - acquiring a stake in the operator.

The SEPI confirmed last Tuesday to the National Securities Market Commission (CNMV) that it is considering purchasing a stake in Telefónica, while noting that it is monitoring the company's situation and that it is carrying out an "internal exploratory analysis."

"This analysis by SEPI does not presuppose the adoption of a decision that involves said acquisition," said SEPI, which although it does not specify the percentage it is considering acquiring, market sources point out that it could be 5%, which would mean a disbursement of about 1,000 million euros if the current price of Telefónica shares is taken into account.

The first vice president and acting Minister of Economy, Nadia Calviño, has avoided delving into the possibility that SEPI could become a shareholder in Telefónica, although she has clarified that "a responsible Government has to analyze all operations."

He has also insisted on the opinion that the Executive has to be "very prudent" in its public statements and, in particular, when it comes to "companies that are listed on the markets", as is the case of Telefónica.

"In addition, it is a strategic company, if not the most strategic, and we are going to defend the general interests and the strategic interest of our country. It is the only declaration that is appropriate, precisely out of responsibility," he added.

Another issue that marks the current situation of the Spanish operator is the arrival of the Saudi group STC to the company's shareholding after announcing on September 5 the acquisition of 9.9% of the company for 2.1 billion euros.

Specifically, STC's participation is divided into 4.9% in direct shares and 5% in derivatives, although the operation must still receive approval from the Government to be completed.

In this sense, the regulations in force in Spain regarding foreign investments in strategic listed companies establish that the Executive must give permission to non-EU investors who intend to acquire more than 10% of a company of this type.

However, this threshold is lowered to 5% in the case of companies with interests in the field of national defense, such as Telefónica.

In this way, the Ministry of Defense would be the recipient of STC's request, although the portfolio headed by Margarita Robles has not yet indicated whether it has already received this notification, so it is unknown if STC wants, for example, a seat on the board of directors of Telefónica.

On the other hand, the data indicated by sector sources that the percentage that SEPI, together with other national investors, would like to acquire from Telefónica is 5%, comes from the possibility, exposed by some media, that the Executive limit the Saudi group's participation in the operator to 4.9%.

Aside from Telefónica's internal situation, other issues that will affect the company are related to the movements that are taking place in the national telecommunications sector, among which the purchase of Vodafone's business in Spain by the British fund stands out. Zegona for 5,000 million euros and the merger between Orange and MásMóvil, which still has to receive approval from the European Commission.

Regarding this latest operation, Barclays analysts consider that Digi has the potential to become the fourth largest operator in the Spanish market as it is the main candidate to take over the 'remedies' that the European Commission may impose on the merger between Orange and MásMóvil. , a situation that, if materialized, would mean that Telefónica would stop earning around 300 million euros per year.

On the other hand, it is assumed that the purchase of Vodafone's business in Spain by Zegona will mean an increase in competition in the sector, especially with regard to prices.

In fact, Zegona's own CEO, Eamon O'Hare, explained after the announcement of the purchase of Vodafone's business in Spain that one of his big bets is to strengthen the operator's 'low cost' brand, Lowi, to compete. with Digi and MásMóvil, for example.