Telefónica has put on hold a plan to spin off its Latin America unit after improving investor sentiment towards Spain offered some breathing space to the heavily indebted telecoms operator.

Telefónica, the euro zone’s largest telecoms operator by market value, has placed on hold a plan to sell a stake in its prized Latin American unit, following a successful debt sale last month.

While no final decision has been taken on whether to sell a stake in the Latin American business, Telefónica is not under pressure to move ahead with the spin-off at the moment, a person familiar with the deal said.

Telefónica declined to comment.

Analysts had valued the Latin American unit at about €40 billion. – (Copyright The Financial Times Limited 2013)