REG - Zegona Comm PLC - MANAGEMENT INCREASES SHAREHOLDING IN ZEGONA TO 29%

Zegona CommunicationsAnnouncement

10/11/2022 07:16

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RNS Number : 9069F  Zegona Communications PLC  10 November 2022

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ZEGONA COMMUNICATIONS PLC ("Zegona")

 

LEI: 213800ASI1VZL2ED4S65

 10 November 2022

 

MANAGEMENT INCREASES ITS SHAREHOLDING IN ZEGONA TO 29%

 

In 2021, Zegona sold its investment in Euskaltel S.A.(1) ("Euskaltel") for
€11.17 per share in cash. This valued Euskaltel's equity at €2.0 billion,
which equated to an Enterprise Value of €3.5 billion (over 10x EBITDA and
21x Operating Cash Flow), a significant premium to European telecommunications
multiples.2 Shortly after completing the sale, Zegona returned £335 million
to its shareholders (over 90% of the proceeds) through a combination of a
dividend and a tender offer to acquire Zegona shares at £1.535 per share (the
"Capital Return").

 

When announcing the Capital Return, management agreed to re-invest £2.5
million into Zegona. This would have involved issuing 1,734,451 new shares at
a price of £1.44 per share3. However, limits on the number of shares which
could be issued at that time meant only 887,594 shares were issued. Yesterday,
the balance of the shares4 were issued at the previously agreed price and as a
result management increased its shareholding from 18.05% to 29.1%.6

 

Following last year's successful sale of Euskaltel, management has been
looking for Zegona's next investment in the European Telecommunications
market. We have been active on a number of proprietary transactions where we
see material upside potential while maintaining strong financial discipline.
This approach has served us well in the current macro-economic environment as
we are now seeing an increased pipeline of even better opportunities where we
have the potential to drive significant value.

 

Enquiries

 

Tavistock (Public Relations adviser - UK)

Tel: +44 (0)20 7920 3150

Lulu Bridges - lulu.bridges@tavistock.co.uk
(mailto:lulu.bridges@tavistock.co.uk)

Jos Simson - jos.simson@tavistock.co.uk (mailto:jos.simson@tavistock.co.uk)

 

 1.  Euskaltel is, a Spanish telecommunications company incorporated in Spain and
     operating in the Basque Country, Asturias and Galicia under regional brands
     and nationally under the Virgin telco brand. At the time, Zegona owned 21.44%
     of Euskaltel and was its largest shareholder.
 2.  Euskaltel multiples based on its Enterprise Value divided by its reported 2020
     EBITDA (as defined by Euskaltel) of €342.8 million and reported 2020
     Operating Cash Flow (as defined by Euskaltel as EBITDA-Capex) of €164.5
     million. Comparable European Cable company multiples of 6.7x 2020 EBITDA and
     13.3x 2020 Operating Cash Flow (Source: Citigroup).
 3.  Being the adjusted Net Asset Value per share of Zegona on 14 October 2021 of
     £1.438, which was calculated, with no provisions being made for any potential
     value being received from the non-current tax receivable (as disclosed in
     Zegona's Annual Report for the year ended December 31, 2021) and no provisions
     for the termination costs of any contracts or other future potential
     liabilities
 4.  Being a total of 846,857 Ordinary Shares.
 5.  17.98%
 6.  Details of dealings by Persons Discharging Managerial Responsibility are
     provided in the Annex below.  It is expected that the new ordinary shares
     will be admitted to trading at 8am on 15 November 2022. Upon admission,
     Zegona's total voting rights will be 6,172,424.

 

 

 

 

ANNEX

 

Notification and public disclosure of transaction by persons discharging
managerial responsibilities and persons closely associated with them

 

 a)  Name                                                         Eamonn O'Hare
 2.  Reason for the Notification
 a)  Position/status                                              Chairman and Chief Operating Officer
 b)  Initial notification/ Amendment                              Initial
 3.  Details of the issuer, emission allowance market participant, auction
     platform, auctioneer or auction monitor
 a)  Name                                                         Zegona Communications plc
 b)  LEI                                                          213800ASI1VZL2ED4S65
 4.  Details of the transaction(s):section to be repeated for (i) each type of
     instrument; (ii) each type of transaction; (iii) each date; and (iv)each place
     where transactions have been conducted
 a)  Description of the financial instrument, type of instrument  Ordinary shares of 1 pence each

     Identification code                                          ZEG
 b)  Nature of the transaction                                    Share subscription
 c)  Price(s) and volume(s)                                       Price                               Volume
                                                                  £1.438                              564,571
 d)  Aggregated information                                       Aggregate Price   Aggregate Volume                    Aggregate total

     Aggregated volume
     £1.438                                                                                           564,571                             8
                                                                                                                                          1
                                                                                                                                          1
                                                                                                                                          ,
                                                                                                                                          8
                                                                                                                                          5
                                                                                                                                          3
                                                                                                                                          .
                                                                                                                                          1
                                                                                                                                          0
 e)  Date of the transaction                                      9 November 2022
 f)  Place of the transaction                                     London Stock Exchange (XLON)

 

 

 

 

 a)  Name                                                         Robert Samuelson
 2.  Reason for the Notification
 a)  Position/status                                              Chief Operating Officer
 b)  Initial notification/ Amendment                              Initial
 3.  Details of the issuer, emission allowance market participant, auction
     platform, auctioneer or auction monitor
 a)  Name                                                         Zegona Communications plc
 b)  LEI                                                          213800ASI1VZL2ED4S65
 4.  Details of the transaction(s):section to be repeated for (i) each type of
     instrument; (ii) each type of transaction; (iii) each date; and (iv)each place
     where transactions have been conducted
 a)  Description of the financial instrument, type of instrument  Ordinary shares of 1 pence each

     Identification code                                          ZEG
 b)  Nature of the transaction                                    Share subscription
 c)  Price(s) and volume(s)                                       Price                               Volume
                                                                  £1.438                              282,286
 d)  Aggregated information                                       Aggregate Price   Aggregate Volume                    Aggregate total

     Aggregated volume
     £1.438                                                                                           282,286                             4
                                                                                                                                          0
                                                                                                                                          5
                                                                                                                                          ,
                                                                                                                                          9
                                                                                                                                          2
                                                                                                                                          7
                                                                                                                                          .
                                                                                                                                          2
                                                                                                                                          7
 e)  Date of the transaction                                      9 November 2022

 f)  Place of the transaction                                     London Stock Exchange (XLON)

 

 

 

 

 

 

 

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