Telefonica Espana SA looks as if it will have to make a provision of about $750m to cover a shortfall in its pension fund which will wipe out most of its annual profits: according to The Independent the transfer from state to private control left Telefonica in the position of having to compensate for the state’s withdrawn pension payments; taking this and the fact that Telefonica currently has a huge investment plan running at the moment, the paper quotes an analyst as saying Telefonica will be well-placed for the future in a couple of years – the trouble is it could also end up with a gearing of 350%.
