Spain’s Telefonica said on Wednesday it will sell its telephone masts in Europe and Latin America to US-based telecom infrastructure firm American Towers for €7.7 billion in cash.

The sale of the nearly 31,000 mobile phone masts which its Telxius unit owns in Spain, Germany, Brazil, Peru, Chile and Argentina will generate a capital gain of €3.5 billion, the heavily indebted Spanish telecoms giant said in a statement.

Telefonica president Jose Maria Alvarez-Pallete said the deal would allow the company to focus on its “most ambitious goals”, such as the merger of its O2 mobile business with Virgin in Britain, the purchase of Oi mobile in Brazil and debt reduction. “This is a deal that makes strategic sense within our roadmap,” he added in the statement.

Telefonica announced at the end of 2019 that it would focus on its most profitable markets – Spain, Britain, Germany and Brazil – and pull out of its less profitable ones, such as those in smaller Latin American countries, as it tries to reinvent itself in the face of stiff competition.

The former state monopoly said it would use the proceeds of the sale to reduce its debt by €4.6 billion. Telefonica’s debt stood at €36.7 billion at the end of September.

Under the terms of the deal, American Towers will lease the phone masts back to Telefonica and will maintain jobs in Telxius.

American Towers will lease the phone masts back to Telefonica and will maintain jobs in Telxius

“Telefonica, once again, is looking for new formulas to manage resources in the most efficient way possible,” the company said.