Zegona Completes FiberPass Transaction with AXA, Boosting Vodafone Spain's Financial Position

About that leverage target of 1.5x – 2x

Leverage is the relationship between debt and earnings capacity. While Zegona does not specify the exact denominator here, companies typically reference a debt-to-earnings measure. Staying in the 1.5x – 2x zone is a sensible, mid-range target for a telecom operator: conservative enough to keep financing costs in check, but not so low that it starves growth or shareholder returns.

Hitting €3.2bn of net debt by March 2026 would be a clear step toward that range and underpins the message of disciplined balance sheet management.

Share buyback: what investors should watch

We know €0.2bn of the FiberPass proceeds will fund the buyback programme. The RNS does not disclose the timing, pace, or remaining authorisation of that programme beyond referencing the original 27 November 2025 announcement.

What matters next is execution: when purchases happen, over what period, and at what average price. Efficient buybacks work best when they are steady, disciplined, and sized against free cash flow and leverage headroom.

Strategic read-through: an asset-light tilt for fixed networks

Eamonn O’Hare describes the completion as the capstone in transforming Vodafone Spain’s fixed network strategy. With Telefónica holding 55% and AXA (BNPP AM Alts) at 40%, Vodafone Spain’s 5% stake keeps a seat at the table while clearly reducing capital intensity and direct ownership risk.

The trade-off is influence. A 5% stake means you are a minority voice in the room, so you rely on partner alignment and contractual protections. On the flip side, offloading heavy infrastructure ownership can free up capital and simplify the investment case around cash returns and core commercial execution.

Risks and watchpoints

• Execution risk: delivering net debt of €3.2bn by March 2026 is the near-term test. Any deviation would raise questions about the pace of deleveraging.
• Interest-rate sensitivity: the “well below €200m” interest cost potential is based on current market debt yields. If yields rise, that potential may narrow.
• Governance and alignment in a joint venture: Vodafone Spain’s 5% stake means dependence on partner cooperation for long-term fibre strategy. Nothing negative implied here – just the structural reality of a JV.

My view: a neat, balance-sheet-friendly outcome

This is a tidy piece of corporate housekeeping with immediate benefits. The cash split is sensible – half for buybacks, half for deleveraging – and the guidance to €3.2bn net debt by March 2026 sets a clear near-term milestone. The interest cost line is doing a lot of the heavy lifting in the equity story; getting that “well below €200m” would be a powerful proof point for free cash flow.

The strategic compromise – less ownership, more financial flexibility – is a common-sense move in fibre, where returns are often better harvested through partnerships. The key now is delivery: keep the buyback disciplined, land the net debt target, and show the interest bill coming down on schedule.

Company background

Zegona is listed on the Main Market of the LSE and focuses on European telecoms, media and technology assets. It is led by former Virgin Media executives Eamonn O’Hare and Robert Samuelson. In 2024, Zegona completed the acquisition of Vodafone Spain, a national provider of fixed, mobile and TV services in Spain.

Key figures from the RNS

Item	Figure
Up-front proceeds to Vodafone Spain	€0.4bn
Allocation to share buyback	€0.2bn
Allocation to debt reduction	€0.2bn
Target net debt by March 2026	€3.2bn
Leverage target	1.5x – 2x
Potential annual interest costs	Well below €200m

Notes from the announcement

• “AXA” refers to BNPP AM Alts, part of the BNP Paribas Group since 1 July 2025.
• FiberPass is Compañía Mayorista de Fibra, S.L., the fibre joint venture between Vodafone Spain, Telefónica and BNPP AM Alts.
• The interest cost comment reflects the company’s application of current market debt yields to the reduced net debt balance.