Government SEPI proposes to replace Telefonica CEO By Reuters

Written by Inti Landauro and Andres Gonzalez

MADRID (Reuters) – State investment fund SEPI has proposed to replace Telefonica (NYSE: ) Chief Executive Officer Jose Maria Alvarez-Pallete, who has led the company since 2016, a source with knowledge of the matter said. he told Reuters on Saturday.

The candidate to replace Alvarez-Pallete is Marc Murtra, who is currently the executive chairman of the security company Indra, whose largest shareholder is SEPI, the source said.

The change would be decided at a board meeting sooner rather than later, a source with knowledge of the matter told Reuters. The shareholders will have to ratify any decision of the board at the general meeting.

Both sources confirmed an earlier report by news website El Confidencial.

Alvarez-Pallete’s current term was due to be renewed this year at the annual shareholders’ meeting.

Under Murtra, Indra, which is 28% owned by the Spanish government, has focused on its defense and aerospace businesses to benefit from increased military spending by European countries after raising tensions. of the world.

Telefonica declined to comment and no one at Indra was immediately available for comment.

The Spanish government has bought a 10% stake worth 2.3 billion euros ($2.36 billion) in Telefonica through SEPI in May 2024 to fight a takeover of the stake. which is Saudi Arabia’s STC by the end of 2023.

On May 8, after reaching 7% of the company, the government asked for a seat on the board of Telefonica and proposed Carlos Ocana, who was the director of the cabinet of the industry department, to represent the interests of the government.

In recent years, Telefonica, like its competitors in Europe, has faced profit pressure from intense competition and the need for large investments in next-generation 5G technology infrastructure.

It has been selling stakes in more mature businesses such as submarine cables or mobile masts and smaller installations in Latin America to support 5G and optic fiber.

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