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UPDATE 2-Telefonica sells $1.3 bln call centre arm to cut debt

Friday, 12 Oct 2012 | 4:51 AM ET

* Bain Capital to buy Atento in 1 billion euro deal

* Enterprise value includes 110 mln euro deferred payment

* Telefonica to provide 110 mln euros in vendor financing

* Telefonica shares up 0.4 percent

(Adds details and analyst comment)

By Tracy Rucinski

MADRID, Oct 12 (Reuters) - Spain's Telefonica has clinched a 1 billion euro ($1.3 billion) deal to sell its Atento call centre business to U.S. private equity firm Bain Capital as part of a drive to cut debt.

The telecoms group is trying to raise funds to reduce a 57 billion euro debt pile and preserve a coveted investment grade credit rating, at a time when its crisis-hit home country faces pressure to seek an international bailout.

The deal includes a 110-million-euro deferred payment by Bain, which was co-founded by U.S. Republican presidential candidate Mitt Romney, as well as 110 million euros in financing provided by Telefonica, the Spanish group said on Friday.

Telefonica has been looking for a buyer of Spanish-based Atento ever since it shelved a stock market listing of the unit, which has over 152,000 employees, last year after failing to fetch enough interest.

"The enterprise value is close to Telefonica's initial ambition for Atento and is 30 percent better than the prices that had been rumoured in the press recently," Juan Rodriguez, an analyst at Banco Sabadell said.

Shares in Telefonica were up 0.4 percent by 0820 GMT, in line with gains on Spain's blue chip index .

The company is also preparing to spin off its German O2 subsidiary and has said it is considering listings in Latin America. It needs to raise between 7 billion and 8 billion euros a year through 2015 to cope with debt repayments.

Telefonica expects to close the Atento sale, which is subject to regulatory approval, before the end of the year. The deal also includes a nine-year agreement for the call centre to continue providing services to Telefonica.

Atento had 1.8 billion euros in 2011 revenue. It is the leading customer relationship management company in Latin America and the second largest in the world, according to Telefonica.

Bain has owned Japan's biggest call centre operator Bellsystems24 since 2009 and recently invested in Genpact, the world's largest business processing outsourcer.

($1 = 0.7726 euros)

(Reporting By Tracy Rucinski; Editing by Hans-Juergen Peters and Mark Potter)

((tracy.rucinski@thomsonreuters.com)(+34 91 585 2153)(Reuters Messaging: tracy.rucinski.thomsonreuters.com@reuters.net))

Keywords: TELEFONICA ATENTO/

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