Approximately 200 people are already working at Telefónica’s new Latin America headquarters, which has moved from Madrid to Brazil’s largest city, São Paulo. The announcement was made at the inauguration of a new Telefónica Brazil location: a 47,000 square-meter site on an avenue where several of the most important ICT companies in Brazil have offices.
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“Brazil is key for the Telefónica group, and moving our headquarters from Madrid to São Paulo shows the country’s importance,” César Alierta, Telefónica’s executive chairman and chief executive officer, told members of the press after the official opening.
The change in headquarters has been expected since the middle of 2012, when Spanish newspaper El Pais reported that Telefónica was planning the move. In November, Antonio Carlos Valente, Telefónica Brazil’s CEO, confirmed the move during a press conference about the launch of m-payment services in Brazil.
Executives have not given any further details about the headquarter change, saying that an opening event will take place later this year. “The migration is not over yet,” said Santiago Fernández Valbuena, Telefónica Latin America’s chairman and CEP who is also a Telefónica S.A. board member.
According to Valbuena, about half of the 200 employees come from outside Brazil, mainly from Europe and other Latin American countries. Valbuena noted that the telecom company is still working on the paperwork for visas, among other issues. “When we have everything set, we will release more details,” he said.
Moving Telefónica’s Latin American headquarters from Spain to Brazil makes sense given that the Latin American region contributes the most to the company’s total revenue (more than 50% in the fourth quarter of last year). During the fourth quarter result announcement, Telefónica said that its success in the region demonstrates the value of the company’s high degree of diversification, and it is key to guarantee sustainable levels of differential growth in the future.
Telefónica group’s full year 2012 net profits fell by 27.3% to $5.14 billion, while its debt dropped by almost $6.5 billion on a quarterly basis to $67.1 billion after a variety of asset sales.
In Brazil, Telefónica will maintain two separate structures: one for Brazil and another for the rest of Latin America. This is a customary layout for many multinational companies.
Telefónica is expected to operate from three global centers: Madrid for its European business and corporate services group; London for Telefónica Digital; and São Paulo for Telefónica Latin America.
Also present at the opening event were the ex-president of Brazil, Luiz Inácio Lula da Silva (although he did not speak with the press), the communications minister, Paulo Bernardo, and Anatel president, João Rezende.
IPO cancelled
Last year, Telefónica was rumored to be planning an initial public offering of its Latin America operations on the New York Stock Exchange, following the IPO of its German unit. When contacted by RCR Wireless News at the time, Telefónica’s public relations representatives said there had been no decision made yet, but they did confirm that an IPO was among the options the telecom operator was evaluating.
However, in February, Bloomberg reported that Telefónica has suspended IPO preparations after the stake sale in its German unit and a bond issue relieved funding needs, according to sources familiar with the issue.
A listing had been considered as an alternative way to reduce the telecom company’s debt.
