Zegona Communications PLC (ZEG)

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Zegona Communications sets EUR1.6 billion return to shareholders

(Alliance News) - Zegona Communications PLC, which owns Vodafone Spain, plans to return EUR1.6 billion to shareholders, and lower debt after sealing deal-making proceeds of EUR1.8 billion.

Zegona, a London-based investor in European telecommunications and media, said the EUR1.6 billion return includes a EUR1.4 billion special dividend, worth 162 pence per Zegona share, and EUR200 million share buyback programme.

Shares in Zegona were up 1.5% to 1,370.00 pence each in London on Thursday morning. Zegona has a GBP10.55 billion market capitalisation.

In addition, EUR200 million will be used to lower debt. This will help reduce leverage to 2.58 times, against a targeted range of 1.5x to 2.0x.

This follows GIC Private Markets Pte Ltd's investment in PremiumFiber, a joint venture between Vodafone Spain and MasOrange SA, announced in August, and the AXA SA investment in FiberPass, a joint venture between Vodafone Spain and Telefonica SA, announced on Tuesday.

The two deals are expected to result in EUR1.8 billion of upfront cash proceeds for Vodafone Spain, EUR1.4 billion from PremiumFiber and EUR400 million from FiberPass.

Zegona was a cash shell back in May 2024, when it bought Vodafone Holdings Europe SLU, the Spanish arm of Newbury, England-based Vodafone PLC, for EUR5 billion.

Zegona said the special dividend will provide EJLSHM Funding Ltd, its parent company, with EUR975 million to settle the Vodafone financing in full and a EUR440 million pro rata payment for remaining ordinary shareholders.

Settling the Vodafone financing will enable a 69% reduction in Zegona ordinary shares, the firm said.

The share buyback will start on completion of the share reduction and Zegona believes this will "drive very attractive returns" to shareholders.

The programme will be conducted by Canaccord Genuity Ltd.

By Jeremy Cutler, Alliance News reporter

Comments and questions to newsroom@alliancenews.com

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