Business

O2's £10bn London stock market flotation on hold

The £10 billion stock market flotation of mobile operator o2 has been put on hold until after Brexit
The £10 billion stock market flotation of mobile operator o2 has been put on hold until after Brexit The £10 billion stock market flotation of mobile operator o2 has been put on hold until after Brexit

THE £10 billion stock market flotation of mobile operator o2 has been put on hold until after Brexit as parent firm Telefonica holds fire in the wake of market uncertainty and a recent spate of IPO flops.

An initial public offering had been expected in 2018 following 4G and 5G spectrum auctions in April, but people with knowledge of the matter have said that those plans are firmly on ice.

Worries over Brexit and the recent IPO failures of Funding Circle and Aston Martin, which sank on their stock market debuts earlier this month, are thought to have convinced bosses at Telefonica to sit tight.

Telefonica chief executive Jose Maria Alvarez-Pallete said earlier this year that financial markets were not yet ready for an o2 float, an opinion reinforced by subsequent events.

Its delay will cause further consternation as volatility, uncertainty and a perceived lack of investor appetite weigh on the listings pipeline.

O2's float is one of the most hotly anticipated, with analysts valuing the UK's second largest mobile firm at up to £10 billion.

The firm booked operating profit of 879 million euros (£776 million) in the first half of the year.

While the operator made no firm commitment to float this year, Telefonica has been eyeing a cash-raising on o2 as a means of driving down its circa 40 billion euro (£35 billion) debt pile.

However, the need to float the British mobile network to generate funds is now less pressing, with the Spanish group seeing its cash flow strengthen.