REG - Zegona Comms. - GIC invests in Vodafone Spain FibreCo

Zegona CommunicationsAnnouncement

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RNS Number : 8024T  Zegona Communications PLC  04 August 2025

GIC invests in Vodafone Spain FibreCo

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

FOR IMMEDIATE RELEASE.

LEI: 213800ASI1VZL2ED4S65

04 August 2025

Zegona Communications plc

Vodafone Spain, MasOrange and GIC sign FibreCo contract

Zegona Communications plc (LSE: ZEG) ("Zegona") is pleased to announce that
Vodafone Holdings Europe, S.L.U. ("Vodafone Spain" or "Vodafone") and
MasOrange S.L ("MasOrange") have entered into a binding contract with GIC
Private Markets Pte Ltd ("GIC ") to create a new fibre network company in
Spain ("FibreCo "). This contract with GIC, a leading global investor,
activates the binding agreement Vodafone Spain signed with MasOrange in
January 2025.

FibreCo will bring together network assets of Vodafone and MasOrange to create
a 100% fibre-to-the-home ("FTTH") network covering 12 million premises across
Spain. This will be the most advanced fibre infrastructure in Europe,
benefiting from having virtually all its FTTH network already built and with
nearly 40% existing network utilization, providing FTTH services to 4.5
million(1) Vodafone and MasOrange customers. These customers will have
access to the leading high-speed FTTH network in Spain, with FibreCo ensuring
the rapid adoption of new technologies such as XGSPON(2). Vodafone will use
FibreCo to provide services to its existing and future retail and wholesale
customers within FibreCo's footprint. The network will be a benchmark for
sustainable development, meeting high ESG standards including delivering
significant energy savings through more efficient use of network assets.

GIC has agreed to purchase a c.25%(3) stake in FibreCo. Following the GIC
investment, the ownership of FibreCo will be 58% MasOrange, 17% Vodafone Spain
and 25% GIC(4).

FibreCo will have a very efficient capital structure with over €5bn(5) of
net debt. The majority of the debt raised will be investment grade. This will
enable optimisation of upfront cash proceeds, whilst ensuring maximum retained
equity for future strategic flexibility. Vodafone will generate upfront
proceeds of €1.4bn from FibreCo.

Vodafone's fibre joint venture with Telefónica (FiberPass) started operations
in March 2025. The combination of FiberPass and FibreCo will complete the
transformation of Vodafone Spain's fixed line strategy, delivering full FTTH
services nationally. The introduction of a third-party investor into our
Telefónica JV and the monetisation of Vodafone's 37% equity stake in
FiberPass is well advanced.

This transaction is subject to customary regulatory approvals and is expected
to close in the final quarter of this calendar year.

Eamonn O'Hare, Chairman and CEO of Zegona, commented, "today's transaction
with MasOrange and GIC is a key milestone in the transformation of Vodafone
Spain. It delivers on many strategic objectives. First and foremost, it
completes our planned network upgrade strategy, delivering 100% FTTH services
across Spain. The combination of FiberPass and FibreCo will give guaranteed
access to a future-proof, all fibre, national network with attractive economic
terms and will enable substantial cost savings across the business. Today's
transaction also delivers on our commitment to monetise our FibreCo JVs. The
€1.4bn upfront proceeds, anticipated capital from the well advanced TEF
FiberPass monetisation and our recently announced move to a "covenant lite(6)"
debt structure provides the company with significant incremental financial
flexibility. As a result, today's transaction leaves Zegona well positioned to
execute a shareholder friendly capital allocation policy which we expect to
announce in the next few months."

 

For further information, please contact:

 

 Alfonso Enriquez                                          Elly Williamson/Tilly Abraham
 Director of Investor Relations                            Media Relations

 Zegona Communications plc                                 Sodali & Co

  zegona@info.sodali.com (mailto:zegona@info.sodali.com)   +44 (0)7970 246 725 / +44 (0)7860 828 603

 

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 acquisition of Vodafone Spain.

 

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 MasOrange

MasOrange provides fixed, mobile and TV services for residential and business
customers across Spain and is the market leader by number of customers.
MasOrange was formed in 2024 through the combination of Orange Spain and
MasMovil and is owned 50% by Orange Group and 50% by Lorca JVco Ltd, which is
majority owned by Providence, Cinven and KKR.

About GIC

GIC is a leading global investment firm established in 1981 to secure
Singapore's financial future. As the manager of Singapore's foreign reserves.
GIC take a long-term, disciplined approach to investing with an asset
allocation strategy that spans three asset groups - Equities, Fixed Income,
and Real Assets.

 

(1) Y1 Customer number including Vodafone Spain customers to be transferred
from current Telefónica wholesale service to FibreCo.

(2) The technology which enables 10 Gpbs downloads and uploads.

(3) GIC has agreed to purchase a c.25% stake in FibreCo. MasOrange and
Vodafone Spain will sell down an equal share

(4) FibreCo will be co-controlled between MasOrange, Vodafone Spain and GIC.

(5) FibreCo has secured total debt commitments reaching €5.4 billion
structured around an Investment Grade rated €4.7 billion senior financing
package and a €700m Holdco financing package.

(6) Zegona recently refinanced its Term Loan A, which was bank financing that
came with more restrictive covenants. Post the refinancing, it has a "covenant
lite" debt structure which provides it with incremental flexibility for
restricted payments including a 3.1x net leverage ratio permitted investments
basket.

 

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