The Government creates a 'digital Sepi' that wants to control 10% of Telefónica

Minister Escrivá announces the new Technological Transformation Society, which was created with 20,000 million, to invest in strategic sectors and group stakes in ‘telecos’ and digital infrastructures and services.

The Minister of Digital Transformation and the Public Service, José Luis Escrivá, announced this Monday at the Mobile World Congress (MWC) in Barcelona, the creation of the Spanish Society for Technological Transformation (SETT) , which aims to bring together all investments in technological matters. Escrivá explained that he will take the urgent processing of the creation of this new company to the next Council of Ministers and that the objective is to have it up and running in two or three months.

This new public business entity will start with an investment mobilization capacity of 20,000 million euros, according to the minister.

10% of Telefónica

Among other activities, the SETT will group the Administration’s stakes in telecommunications companies, and digital infrastructures and services, to seek synergies with the aim of promoting technological transformation. Because of this role of public holding of business shares, it could incorporate the participation of up to 10% of the capital that the Government has ordered the Sepi (dependent on the Treasury) to acquire . In fact, according to Escrivá himself “it makes sense” to fit the participation of the historic telecommunications operator into the SETT. This is probably one of the reasons for adopting the emergency mechanism in its constitution, so that it can incorporate the Government’s telecom package immediately.

The objectives of this public holding company are very ambitious because it also aims to support companies active in Spain, regardless of their size and ownership of capital, that commit to carrying out technological projects in the digital field and emerging sectors related to digitalization. through the granting of credits, the taking of shares or other minority participations in the share capital or the granting of subsidies, among other forms of support.

In fact, Escrivá has indicated that “the SETT is going to work by the method of co-investment with private capital in almost all modalities.”

Sum of entities

The new SETT will not be born from scratch, since it will integrate some existing structures linked to the Ministry of Digital Transformation. Thus, it will integrate the current State Society of Microelectronics and Semiconductors (SEMyS) to give a boost to the Perte Chip. According to the minister, the aim is to highlight the Spanish semiconductor industry in the different European and international programs, particularly in the field of design, skills development, pilot lines or manufacturing, especially the coordination of actions related to the EU Chips Act.

But, in addition, SETT is intended to provide business, consulting, technical assistance or construction and management services of infrastructure related to the semiconductor industry. Likewise, the new state group plans to have a team specialized in investment operations, capitalizing and consolidating transformative projects in the technological field, and, in particular, in venture capital aimed at promoting investment in start-up or scale-up companies with a component of technological innovation and with high traction capacity for the rest of the economy. In this way, it is intended to serve to attract investors in public-private collaboration to generate industrial capabilities in strategic sectors.

Audiovisual

Finally, it will also act with financial and promotional measures related to the actions planned in the audiovisual sector, to turn Spain into a pole of attraction for the industrial production of content.

The SETT will bring together the Perte Chip , endowed with 12,000 million for semiconductors, the NextTech fund, with 4,000 million (2,000 of them private) to invest in companies with a high innovation component or the Audiovisual Hub fund, with 1,700 million, which will It would allow an investment capacity close to 20,000 million.

A potential conflict of powers in the Government

The creation of such an ambitious state body with so many functions (from holding the State’s technological investees – including Telefónica – to consulting, from venture capital investor to subsidy manager, from construction company or manager of infrastructures related to semiconductors to manager of aid to the audiovisual sector) can generate a shock wave within the Government of Pedro Sánchez.

The reason is that in order to centralize in a single organization all those powers and resources, currently dispersed in different levels of the Public Administration, it will be necessary to “herd” them from other ministerial portfolios, which will probably not agree with this amputation of powers and resources.

The case of Telefónica’s participation is especially significant, due to the strategic nature of the Spanish telecom giant and the capacity of influence that the Government will have on the operator once it substantiates its entry into the capital and consequently into the board. So far, the only thing known is that last December the Government ordered the State Society of Industrial Participations (Sepi), controlled by the Treasury, to take up to 10% of the capital of the operator to provide “greater shareholder stability” and to ” safeguard its strategic capabilities”.

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