Zegona Communications plc has announced a capital allocation plan to distribute €1.6 billion to its shareholders and reduce debt by €200 million. This follows the proceeds from two recent FibreCo transactions. The shareholder return includes a €1.4 billion special dividend, equivalent to £1.62 per Zegona ordinary share, and a €200 million share buyback program. This plan was unveiled on November 27, 2025.
A significant portion of the special dividend, €975 million, will be used to fully settle the Vodafone financing with EJLSHM Funding Limited. This repayment, comprising a €900 million principal sum and €75 million in accrued returns, will lead to the cancellation of 523 million Zegona ordinary shares held by EJLSHM. This action is expected to reduce Zegona's total ordinary shares in issue by 69%, from 759 million to 236 million, and simplify its capital structure. The remaining €440 million of the special dividend will be distributed pro rata to other ordinary shareholders, also equating to £1.62 per share.
The €200 million share buyback program is set to commence after the cancellation of the 523 million EJLSHM shares. Zegona believes this buyback will generate attractive returns for shareholders, especially after the substantial reduction in the share count. The company initiated the buyback program immediately, ahead of the Vodafone financing repayment, which was expected around January 7, 2026. The buyback is intended to reduce the company's share capital and will involve canceling the purchased ordinary shares.
Furthermore, €200 million of the total proceeds will be allocated to debt reduction, bringing Zegona's net debt down to €3.4 billion and its leverage to 2.58x. This move underscores Zegona's commitment to its target leverage range of 1.5x-2x and is projected to further decrease annual interest costs. Annual interest costs have already fallen from €294 million at the time of the Vodafone acquisition to €235 million after recent refinancings, with potential to drop below €200 million post-debt reduction.
