REG - Zegona Comms. - Vodafone Spain & Telefonica sign FibreCo contract

Zegona CommunicationsAnnouncement

07/11/2024 07:00

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RNS Number : 3364L  Zegona Communications PLC  07 November 2024

 

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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.

 

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