Zegona Communications plc has outlined a plan to distribute €1.6 billion to its shareholders, stemming from €1.8 billion in proceeds generated from two recent FibreCo transactions. The distribution includes a significant €1.4 billion special dividend, equivalent to £1.62 per Zegona ordinary share, and a €200 million share buyback program. This capital allocation strategy is designed to be shareholder-friendly, simplify the company's capital structure, and ensure a suitable balance sheet for the business.
The €1.4 billion special dividend plays a crucial role in settling Zegona's financing with Vodafone. Specifically, €975 million of this dividend will be paid to EJLSHM Funding Limited to fully resolve the Vodafone financing. This settlement will lead to the cancellation of 523 million Zegona ordinary shares held by EJLSHM, effectively reducing Zegona's ordinary shares in issue by approximately 69%, from 759 million to 236 million. The remaining €440 million of the special dividend will be distributed pro rata to other ordinary shareholders, also equating to £1.62 per share.
In addition to the shareholder returns, Zegona plans to use €200 million of the FibreCo proceeds to reduce its net debt. This reduction is expected to bring net debt down to €3.4 billion and lower the leverage ratio to 2.58x. This move aligns with Zegona's commitment to achieving a leverage target of 1.5x-2x and is projected to further decrease annual interest costs, which have already fallen from €294 million at the time of the Vodafone acquisition to €235 million post-recent refinancings, with potential to go below €200 million. The special dividend was approved by shareholders on December 22, 2025, and was paid on January 7, 2026.
