Madrid-based Telefónica said it would sell up to 258.75 million shares in Telefónica Deutschland Holding AG at between €5.25 and €6.50 each. The sale could raise as much as €1.68 billion ($2.2 billion) and value the unit, the No. 4 German wireless services company, at as much as €7.3 billion.

The listing, which includes 225 million shares as well as an extra 33.75 million set aside in case of strong demand, would put up to 23.17% of the company in investor's hands.

"Our strong sales growth in past years as well as our internal efforts to become more efficient allowed us to significantly increase our cashflow. We can now extend our push for growth and create attractive returns," said Telefónica Deutschland CEO René Schuster in a statement.

The IPO of the German unit, which is best known by its O2 brand name, is the latest in a string of deals by Telefónica CEO César Alierta (pictured). The executive is wrestling to keep the company's €58 billion debt pile in check and prevent a further downgrade of his company's liabilities after Standard & Poor's cut their rating to BBB in May.

Last week the company agreed to sell its Atento call center business to Bain Capital LLC for €1.04 billion and in June it agreed to sell a 4.56% stake in Asian peer China Unicom Ltd. to the target's parent for HK$109 billion ($1.41 billion). The sale will reduce Telefónica's Unicom stake to 5.01%.

In addition to directly raising cash, Telefónica last month also pulled €4.3 billion in cash out of the German unit in the form of a special dividend. Analysts said the move balances the division's cash with its liabilities.

The Spanish company said it would take orders for the Telefónica Deutschland IPO between Oct. 17 and Oct. 29 with the shares beginning to trade Oct. 30 in Frankfurt.

In the first half, the German unit had 18.8 million customers, 6% more than in the first half of 2011, with sales growing 4.7% to €2.55 billion. Its operating income before dividends and amortization - the only other figure Telefónica releases for units - rose 12.5% in the period to €628 million.

UBS and JPMorgan Chase & Co. are handling the IPO, with Bank of America Corp., BNP Paribas SA, Citigroup Inc. and HSBC Holdings plc. acting as joint bookrunners.