Zegona Communications creates new fibre network company in Spain with GIC investment
Why we think this is good
The RNS announcement outlines a strategic partnership between Vodafone Spain, MasOrange, and GIC to create a new fibre network company (FibreCo) in Spain. This transaction is positive for Vodafone as it completes the company's planned network upgrade strategy, delivering 100% FTTH services across Spain. The transaction also provides Vodafone with significant upfront proceeds of €1.4bn and improved financial flexibility. Overall, the news appears to be a positive development for Vodafone's business and financial position.
Key Points
- Vodafone Spain and MasOrange have entered into a binding contract with GIC to create a new fibre network company in Spain called FibreCo
- FibreCo will create a 100% FTTH network covering 12 million premises across Spain
- GIC has agreed to purchase a c.25% stake in FibreCo, with the remaining ownership split between MasOrange (58%) and Vodafone Spain (17%)
- Vodafone will generate upfront proceeds of €1.4bn from the transaction, providing the company with significant financial flexibility
Summary
Zegona Communications plc (LSE: ZEG) has announced that Vodafone Spain and MasOrange have entered into a binding contract with GIC to create a new fibre network company in Spain called FibreCo. 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. GIC has agreed to purchase a c.25% stake in FibreCo, with the remaining ownership split between MasOrange (58%) and Vodafone Spain (17%). Vodafone will generate upfront proceeds of €1.4bn from the transaction, providing the company with significant financial flexibility.