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LEI: 213800ASI1VZL2ED4S65
Zegona Communications plc
Vodafone Spain and Telefonica
sign FibreCo contract
7 November 2024
Zegona Communications plc (LSE: ZEG)
("Zegona") is pleased to announce Vodafone ONO, S.A.U. ("Vodafone
Spain") and Telefónica de España, S.A.U. ("Telefonica") (together
the "Parties") have today signed a binding contract to create a new
fibre network company in Spain ("FibreCo").
Earlier this year, Zegona announced
it had signed non-binding agreements to create FibreCos with both
Telefonica and MasOrange and a non-binding agreement for a new
fibre wholesale agreement with Telefonica. The combination of
these three transactions was designed to complete the
transformation of Vodafone Spain's fixed line strategy, delivering
full "Fibre-to-the-home" services nationally across
Spain. Today's announcement delivers a key component of that
strategy.
This new FibreCo will cover 3.6
million premises across Spain, providing fibre access services for
1.4 million Vodafone Spain and Telefonica customers. FibreCo will
provide access to the highest quality high-speed fibre optic
network and support the rapid adoption of new technologies,
benefiting Vodafone Spain and Telefonica customers. Vodafone Spain
will use FibreCo to provide services to its existing and future
retail and wholesale customers within its footprint. This network
will be a benchmark for sustainable development, meeting high ESG
standards through more efficient use of network assets.
The FibreCo is expected to have run
rate EBITDA of circa €125 million after 3 years. The ownership
split of the company will be 63% Telefonica and 37% Vodafone Spain.
The Parties plan to bring a third-party financial investor into the
share capital of FibreCo, with Telefonica retaining majority
ownership and Zegona holding 10%. Given the high quality of the
existing fibre infrastructure and the multi tenant nature of the
company, we expect FibreCo to be a highly valued asset commanding a
significant valuation premium.
The transaction is subject to
customary regulatory approvals. FibreCo completion together with
the introduction of a third-party investor is expected in the first
half of 2025.
Eamonn O'Hare, Chairman and CEO of
Zegona, commented "Entering into this FibreCo partnership with
Telefonica demonstrates our commitment to transform Vodafone
Spain's fixed line strategy. This transaction gives our business
guaranteed access to a future-proof all fibre network with
attractive economic terms. Creating and monetising this
FibreCo is expected to deliver significant capital returns to
Zegona creating value for all stakeholders."
Enquiries
Tavistock (Public Relations adviser - UK)
Lulu Bridges / Katie Hopkins /
Ruairi Millar
Tel: +44 (0)20 7920 3150
About
Zegona
Zegona was established in 2015 with
the objective of investing in businesses in the European
Telecommunications, Media and Technology sector and improving their
performance to deliver attractive shareholder returns. Zegona is
led by former Virgin Media executives Eamonn O'Hare and Robert
Samuelson. On 31
May 2024, Zegona completed the 100% acquisition of Vodafone Spain
for €5.0 billion.
About Vodafone
Spain
Vodafone Spain is a national
provider of fixed, mobile and TV services in Spain, serving
consumer, business and public administration customers. It was
acquired by Zegona in May 2024.
About
Telefonica
Telefonica is one of the largest
telecommunications service providers globally. It offers fixed and
mobile connectivity, as well as a wide range of digital services
for residential and business customers. With around 388 million
customers and more than 100,000 employees, Telefónica operates in
Europe and Latin America. Telefonica is a listed company with its
shares trading on the Spanish Stock Exchange and those of New York
and Lima.