Saudi Telecom wants to have its advisor at Telefonica by the end of the year

Saudi Telecom will exercise its political rights in Telefonica, approved this Thursday by the Council of Ministers after several weeks of discussions and analysis of the Ministry of Defense and Investment Council (Jinvex) and 14 months from the date of acquisition of the first block of shares. Knowledgeable sources consulted by THE OBJECTIVE indicate that the Middle Eastern telecom company’s goal is to have a representative on the Spanish company’s board of directors by the end of this year or early 2025 at the latest.

This means that STC order this chair in the next two weeks so that it can be approved by the board of directors in December, the last year of the year. Otherwise, the whole process would have ended in January. One thing is clear: the Saudis will not give up their representation on Telefonica’s top management body as major shareholders, already owning 9.9% of the capital.

As this newspaper explained, The Saudis are seeking a fair distribution of power as major shareholders. Within the framework of understanding, cooperation with the other two partners and without the desire to influence the management team, they want to participate in important decisions. This marks a continuation of STC’s original plan to float in Telefonica, which always involved a director in the Spanish company.

Telefonica shareholders

After government approval STC will in the next few hours repurchase its 5% stake in derivatives it bought last September. and this will be added to the 4.9% he had to date. With this 9.97%, it will have a share equivalent to that of the State Society for Industrial Participation (SEPI) – which even before the summer had 10% – and Criteria Caixa, whose share has also risen to 9.9% during this year. A radical change in the management of Telefonica, which will move from fragmented capital to three identifiable owners (30% in total) who are destined to understand each other.

New management, which must be approved by Telefonica’s board of directors. The latest change occurred in May, when SEPI proposed Carlos Ocaña as its representative to replace Carmen García de Andrés, who had been a member since May 2017. Likewise, at this year’s shareholders’ meeting it ratified five members whose mandate expired in June: Isidro. Faine (who went from representing Caixa to Criteria), José Javier Echenique, Peter Löscher, Veronica Pascual and Claudia Sender.

Previously, executive president José María Álvarez-Pallete made changes in early December last year – a few days before the confirmation of SEPI’s entry into Telefonica – under which he included Solange Sobral, director of Telefonica Brazil, and Alejandro Reynal. , CEO of Four Seasons Hotels and former CEO of Atento, former call center Telefonika company.

Changes in the council

For this reason, the company hopes to make one last and only major change by taking advantage of the arrival of the STC consultant. The first thing Pallete must assess is the member who will have to leave to make room for a new shareholder.which would surely denote a man. To protect balance and parity rules, one more person must come forward as the current number of 15 members will not be increased. This points to Francisco José Riberas as the one who may have to give up his chair, although Javier de Paz is also mentioned, who at the moment is the only one who is neither independent nor possessive, but rather has the character of “another external”.

However, the new director will also be in a proprietary position (representing the relevant shareholder) and unless another director of equal category leaves, there may be an imbalance in the governance rules which require that at least half of the members are independent. Therefore, a second change must take place, which must also take into account the fact that 40% of the board are women, a balance that was paradoxically upset with the arrival of Carlos Ocaña, the representative of the government and SEPI.

All pools mark the departure of BBVA representative José María Abril, who will also leave his post as vice president, leaving the only vice president for now in the hands of Isidro Faine. The bank has only 5% capital and does not intend to increase the share of participation. This opens the door to the arrival of a new adviser, who should be independent, but, according to some sources, may be close to the government.