Telefonica (TEF) announced that they are selling half their stake in China Unicom for $1.4 billion. They still own 5% in the company moving forward. I think this is a positive mood as it allows the company to reduce their debt load. Telefonica has some valuable minority interests but unfortunately it is not a really good time to divest them because valuations are so depressed in the telecom industry. I think fears over Telefonica’s balance sheet are overblown but at the same time I never encourage high leverage ratios. Their leverage has reduced their flexibility to buy back stock at the absurd price that it currently trades at, so the sooner the situation is rectified the more quickly the stock is likely to appreciate.
http://seekingalpha.com/article/632291-telefonica-a-tale-of-two-worlds