Telefonica readies capital increase, report says

MADRID (Reuters) -Spanish telecom company Telefonica is preparing a capital increase as part of a new strategic plan to be disclosed in the coming months, news website Vozpopuli reported on Thursday, citing unnamed sources close to the company.

It said Telefonica's management had discussed the possibility to raise cash through an issuance of new shares with investment bankers and leading shareholders such as the Spanish government, Spanish investment fund Criteria Caixa and Saudi Telecom, who were generally supportive of the idea.

A Telefonica spokesperson declined to comment.

Telefonica shares were down more than 6% in afternoon trading.

(Reporting by Inti Landauro, editing by Andrei Khalip)