State-owned SEPI proposes to exchange Telefonica CEO By Reuters
By Inti Landauro and Andres Gonzalez
MADRID (Reuters) -Spanish telecom large Telefonica (NYSE:)’s board agreed on Saturday to nominate defence firm Indra’s chairman Marc Murtra as its new CEO, changing Chief Government Jose Maria Alvarez-Pallete following a request from state-owned fund SEPI.
Telefonica’s board held a rare assembly on Saturday to resolve to terminate Alvarez-Pallete’s contract and provide his job to Murtra, who accepted it, the corporate mentioned in a submitting to the inventory market regulator.
The choice nonetheless must be ratified by shareholders, the corporate mentioned.
State-owned funding fund SEPI had proposed to exchange Alvarez-Pallete, who has led the corporate since 2016, with Murtra, an individual with data of the matter instructed Reuters earlier on Saturday.
The present time period of Alvarez-Pallete was due for renewal this 12 months on the annual basic shareholders assembly normally held in April or Could.
Beneath Murtra, Indra, which is 28% owned by the Spanish authorities, has targeted on its defence and aerospace enterprise to profit from European international locations’ elevated navy budgets following heightening world tensions.
The Spanish authorities purchased a ten% stakeworth about 2.3 billion euros ($2.36 billion) in Telefonica by way of SEPI in Could 2024 to counterbalance the acquisition of an identical stake by Saudi Arabia’s STC in late 2023.
The acquisition gave the federal government a seat on Telefonica’s board.
Given Telefonica is taken into account a defence service supplier and subsequently a strategic firm, the federal government solely permitted the transaction in November 2024 after securing a stake within the telecom firm just like STC.
Over the previous years, Telefonica, like rivals in Europe, has confronted a squeeze on profitability from fierce competitors and the necessity for hefty funding in infrastructure for the 5G next-generation cellular expertise.
It has been promoting stakes in additional mature companies comparable to submarine cables or cellular masts and smaller operations in Latin America to fund 5G and optic fibre.
($1 = 0.9736 euros)
