Telefonica Chairman’s M&A Ambitions Face Old Debt Challenges

Telefonica SA’s new chairman is running into an old problem. After the better part of a decade focused on cutting debt, the company still doesn’t have the cash it needs to chase deals and growth.

The Spanish phone carrier is looking for diverse ways to simplify its structure by buying out partners in joint ventures and reorganizing certain operations to make itself more flexible for potential deals in the European telecommunications industry. Executive Chairman Marc Murtra, who took over in January, has ordered a strategic review to be unveiled in the second half of the year.

But even ...