Spain’s Telefónica has confirmed that it is to exit the Czech and Slovak Republics through the sale of its holdings in the markets to Czech investment group PPF. Telefónica said in October that it was exploring its options in the Czech Republic, as part of a wider process of withdrawal from non-core markets.

The Spanish incumbent holds just over 70 per cent of Telefónica Czech Republic, which includes the Slovak operation, with the remainder held by private and institutional investors. In an announcement made November 5^th the firm said it would sell a 65.9 per cent stake in the Czech business to PPF for €2.47bn. It will retain a 4.9 per cent share in the business and remain an “industrial and commercial partner” of the operation for the next four years.

The O2 brand will remain in use in the Czech and Slovak Republics for a maximum of four years, Telefónica said.

Telefónica, which built a substantial debt pile investing in Latin America, has pledged to cut debt to below €47bn by the end of 2013, partly through disposal of non-core assets. Earlier this year it announced that it had slashed debt by €10bn in the twelve months to the end of June, following disposals in Central America and Inversis and its exit from the Irish market through the sale of its assets there to Hutchison’s 3.

“It is anticipated that this transaction will have a positive impact reducing Telefónica Group’s net debt by approximately €2.685bn which will enable Telefónica to meet its net financial debt guidance by year end,” the firm said in a statement.

Meanwhile its purchase of Dutch incumbent KPN’s German operation E-Plus was approved in October by KPN shareholders at an extraordinary general meeting. In a deal sweetened to win their backing, Telefónica is paying €5bn in cash and a 20.5 per cent stake in Telefónica Deutschland post transaction. The total value of the deal is €8.55bn.

O2 Czech Republic holds second place in the mobile market, with 5.1 million subscriptions, according to estimates from Informa’s WCIS+. T-Mobile leads the market with 5.8 million while Vodafone is in third place with 3.3 million. The firm is third of three in the Slovak Republic mobile market, with 1.54 million users according to WCIS+ estimates, behind T-Mobile with 2.26 million subscriptions and Orange with 2.76 million.