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Telefonica Told to Utilize Part of 3 Billion Dollar Wedged in Venezuela


Telefonica Told to Utilize Part of 3 Billion Dollar Wedged in Venezuela

Telefonica Told to Utilize Part of 3 Billion Dollar Wedged in Venezuela

According to a firm presentation noticed by the Bloomberg Survey, Telefonica SA makes several plans for raising expenditure in Venezuela during this year for hedging against further fall in value of money it cannot deport to Spain.As per the internal documents Telefonica that extended in Venezuela with a takeover of 2004 of the BellSouth Corporation’s Latin American wireless trade, collected dividends which are valued at nearly 18.8 billion over past seven years.

As per internal documents dated 9 April, Telefonica, which extended with the takeover of Latin American wireless trade of BellSouth Corporationin Venezuela, collected dividends valued at nearly 18.8 billion over seven years.Dividends have lost nearly 1.4 billion dollars in worth, consideringthe devaluation of bolivar in the month of February to nearly 6.3 dollar from about 4.3.

As per the presentation, Telefonica will raise the Venezuelan unit’s capital expenditure budget by seventy eight percent to nearly 3.9 billion bolivar. Amount excludes an extra six hundred million bolivar earmarked for purchasing the high-speed wireless license. It is the second biggest mobile carriers in the nation after the CA Telefonosde Venezuela owned by state.

AsdrubalOliveros, research director at the Ecoanalitica located in Carcas said that the fact that overseas firms cannot deport money in the dividends to their nations has become a big issue for them. He said overseas firms in Venezuela will possibly face rising losses during this year due to inflation and more overseas exchange adjustments.

Overseas firms might hold nearly 12 billion dollars in the dividends that they cannot repatriate, as per the estimate by Oliveros. Several international firms from the Procter & Gamble Company to Merck & Company were actually affected by the devaluation of bolivar.

An individual who is familiar with this matter said that the CEO of Telefonica in Latin America named as Santiago Valbuena was directed by the local executives earlier this week on the expenditure plans of the Venezuela unit and earning projection.

Telefonica is considering the next set of assets to China from Europe as it seeks in reducing the total debt by around 4.3 billion euro during this year. This company is making preparations to sell the shares of division in Columbia after hesitating an initial offering for all the assets of Latin America. The shares of Telefonica fell 0.1% to nearly 10.70 euros in the morning at 9, valuing the firm at nearly 48.7 billion euro.

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