TIDMZEG
RNS Number : 0624N
Zegona Communications PLC
14 January 2019
NOT FOR DISTRIBUTION, PUBLICATION OR RELEASE, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES
OR TO ANY US PERSON, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF
SOUTH AFRICA, THE EEA OR TO ANY PERSON LOCATED OR RESIDENT IN AN
EEA STATE OTHER THAN THE UK, BELGIUM, THE NETHERLANDS, ITALY,
IRELAND AND SPAIN, OR ANY OTHER JURISDICTION IN WHICH THE
DISTRIBUTION, PUBLICATION OR RELEASE WOULD BE UNLAWFUL.
This announcement is an advertisement and does not constitute a
prospectus in connection with an offering of securities of Zegona
Communications plc ("Zegona" or the "Company"). Investors must
neither accept any offer for, nor acquire, any securities to which
this document refers, unless they do so on the basis of the
information contained in the prospectus expected to be published by
the Company on 15 January 2019 (the "Prospectus"), a copy of which
is available for inspection from the Company's website. The
subscription or purchase of ordinary shares of the Company is
subject to specific legal or regulatory restrictions in certain
jurisdictions. Persons distributing this communication must satisfy
themselves that it is lawful to do so. The Company assumes no
responsibility in the event there is a violation by any person of
such restrictions.
ZEGONA COMMUNICATIONS PLC
LEI: 213800ASI1VZL2ED4S65
results of Placing
Zegona is pleased to announce the successful completion of the
placing announced earlier today.
A total of 95,715,728 ordinary shares of GBP0.01 each in the
equity capital of Zegona (the "Placing Shares") have been placed by
Barclays Bank PLC, acting through its investment bank ("Barclays")
and Oakley Advisory Limited ("Oakley") at a price of 105 pence per
Placing Share (the "Placing Price"), raising gross proceeds of
approximately GBP100.5 million. The Placing Shares being issued
represent approximately 75.8 per cent. of Zegona's issued ordinary
share capital prior to the Placing.
The Placing Price of 105 pence each represents a discount of
12.5 per cent. to the middle market price at the time at which
Zegona and Barclays and Oakley agreed the Placing Price.
The Placing Shares will, when issued, be credited as fully paid
and rank pari passu with the existing ordinary shares of 1 pence
each in the equity capital of Zegona, including in respect of the
right to receive all future dividends and distributions declared,
made or paid.
The Placing will require approval by Zegona shareholders for the
issuance of additional equity on a non pre-emptive basis at a
shareholders' meeting to be held on 7 February 2019.
Application will be made to the Financial Conduct Authority
("FCA") for admission of the Placing Shares to the standard listing
segment of the Official List and to the London Stock Exchange (the
"LSE") for admission to trading of the Placing Shares on the LSE's
Main Market for listed securities (together "Admission"). It is
expected that Admission will take place at 8.00 a.m. on 11 February
2019 and that dealings in the Placing Shares on the LSE's main
market for listed securities will commence at the same time.
Enquiries
Tavistock (Public Relations adviser - UK)
Tel: +44 (0)20 7920 3150
Jos Simson - jos.simson@tavistock.co.uk
Lulu Bridges - lulu.bridges@tavistock.co.uk
Llorente y Cuenca (Public Relations adviser - Spain)
Tel: +34 (0) 91 563 7722
Jorge López-Zafra - jlopez@llorenteycuenca.com
Important Notice
This announcement has been prepared in accordance with English
law, the Listing Rules and the Disclosure Guidance and Transparency
Rules and information disclosed may not be the same as that which
would have been prepared in accordance with the laws of
jurisdictions outside England.
The distribution of this announcement in jurisdictions outside
the United Kingdom may be restricted by law and therefore persons
into whose possession this announcement comes should inform
themselves about, and observe such restrictions. Any failure to
comply with the restrictions may constitute a violation of the
securities law of any such jurisdiction.
Certain information in this announcement is based on management
estimates. By their nature, estimates may not be correct or
complete. Accordingly, no representation or warranty (express or
implied) is given that such estimates are correct or complete or
founded on reasonable grounds. No representation or warranty
(express or implied) is given that such estimates are founded on
reasonable grounds. Zegona does not undertake any obligation to
correct or complete any estimate whether as a result of being aware
of information (new or otherwise), future events or otherwise.
The information contained in this document is for background
purposes only and does not purport to be full or complete. No
reliance may be placed by any person for any purpose on the
information contained in this document or its accuracy, fairness or
completeness. All information in this announcement in respect of
Euskaltel and its group has been obtained from publicly available
information and has not been verified.
This announcement is not for release, publication, distribution,
directly or indirectly, in or into the United States (including its
territories and possessions and any state or other jurisdiction of
the United States) or to any US person. This announcement does not
constitute or form a part of any offer to sell or solicitation to
purchase or subscribe for securities in the United States or in any
other jurisdictions. The securities referred to in this
announcement have not been, and will not be, registered under the
United States Securities Act of 1933, as amended (the "US
Securities Act") or the securities laws of any state of the United
States or with any securities regulatory authority of any state or
other jurisdiction of the United States or any state securities
laws of the United States and may be offered and sold (a) in the
United States, and to US persons outside the United States, only to
persons who are both "qualified institutional buyers" (as defined
in Rule 144A under the US Securities Act) and "qualified
purchasers" (as defined in Section 2(a)(51) of the US Investment
Company Act of 1940, as amended (the "US Investment Company Act"),
in transactions exempted from, or not subject to, the registration
requirements of the US Securities Act, and (b) outside the United
States only to non-US persons in "offshore transactions" as defined
in, and in reliance on, Regulation S under the US Securities Act.
The Company has not intended and does not intend to make any public
offer of securities in the United States. No registration has been
or will be made under the US Investment Company Act.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This announcement includes statements that are, or may be deemed
to be, "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates",
"envisages", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would",
"could" or "should" or, in each case, their negative or other
variations or comparable terminology. These forward-looking
statements include matters that are not facts. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances. A number of factors
could cause actual results and developments to differ materially
from those expressed or implied by the forward-looking statements,
including, without limitation: Euskaltel's failure to work with
Zegona to improve the performance of the business, a condition to
the Placing not being satisfied, expected cost savings not being
realised, changing demands of consumers of telecommunications
services, the increasing adoption of free-to-home and
direct-to-home television services, changing business or other
telecommunications market conditions, and general economic
conditions. These and other factors could adversely affect the
outcome and financial effects of the plans and events described in
this announcement. Forward-looking statements contained in this
announcement based on past trends or activities should not be taken
as a representation that such trends or activities will continue in
the future. Subject to any requirement under the Listing Rules, the
Prospectus Rules, the Disclosure Guidance and Transparency Rules or
other applicable legislation or regulation, Zegona does not
undertake any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. Investors should not place undue reliance on
forward-looking statements, which speak only as of the date of this
announcement.
Barclays Bank PLC and Oakley Advisory Limited
Barclays Bank PLC, acting through its Investment Bank
("Barclays") and which is authorised in the United Kingdom by the
Prudential Regulation Authority and regulated by the Financial
Conduct Authority ("FCA") and the Prudential Regulation Authority,
is appointed as the Company's global co-ordinator and underwriter
only and is therefore acting only for the Company in connection
with the Placing and is not acting for or advising any other
person, or treating any other person as its client, in relation
thereto and will not be responsible for providing the regulatory
protection afforded to clients of Barclays or advice to any other
person in relation to the matters contained herein. Neither
Barclays nor any of its directors, officers, employees, advisers or
agents accepts any responsibility or liability whatsoever for this
announcement, its contents or otherwise in connection with it or
any other information relating to the Company, whether written,
oral or in a visual or electronic format.
Oakley Advisory Limited ("Oakley"), which is authorised and
regulated in the United Kingdom by the FCA, is appointed as the
Company's financial advisor and co-bookrunner only and is therefore
acting only for the Company in connection with the matters
described in this announcement and is not acting for or advising
any other person, or treating any other person as its client, in
relation thereto and will not be responsible for providing the
regulatory protection afforded to clients of Oakley Advisory
Limited or advice to any other person in relation to the matters
contained herein. Neither Oakley Advisory Limited nor any of its
directors, officers, employees, advisers or agents accepts any
responsibility or liability whatsoever for this announcement, its
contents or otherwise in connection with it or any other
information relating to the Company, whether written, oral or in a
visual or electronic format.
Information for Distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/ 65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II; and (c) local implementing measures (together, the "MiFID
II Product Governance Requirements"), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which
any manufacturer (for the purposes of the MiFID II Product
Governance Requirements) may otherwise have with respect thereto,
the Zegona Shares being the subject of the Placing have been
subject to a product approval process, which has determined that
such Zegona Shares are: (i) compatible with an end target market of
retail investors and investors who meet the criteria of
professional clients and eligible counterparties, each as defined
in MiFID II; and (ii) eligible for distribution through all
distribution channels as are permitted by MiFID II (the "Target
Market Assessment"). Notwithstanding the Target Market Assessment,
distributors should note that: the price of the Zegona Shares may
decline and investors could lose all or part of their investment;
the Zegona Shares offer no guaranteed income and no capital
protection; and an investment in the Zegona Shares is compatible
only with investors who do not need a guaranteed income or capital
protection, who (either alone or in conjunction with an appropriate
financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources
to be able to bear any losses that may result therefrom. The Target
Market Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the Placing. Furthermore, it is noted that, notwithstanding the
Target Market Assessment, Barclays and Oakley will only procure
investors who meet the criteria of professional clients and
eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness
for the purposes of MiFID II; or (b) a recommendation to any
investor or group of investors to invest in, or purchase, or take
any other action whatsoever with respect to the Zegona Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the Zegona Shares and determining
appropriate distribution channels.
Company Website
Neither the content of the Company's website, nor the content on
any website accessible from hyperlinks on its website for any other
website, is incorporated into, or forms part of, this announcement
nor, unless previously published by means of a recognised
information service, should any such content be relied upon in
reaching a decision as to whether or not to acquire, continue to
hold, or dispose of, securities in the Company.
The person responsible for arranging for the release of this
announcement on behalf of Zegona is Dean Checkley, whose business
address is 20 Buckingham Street, London WC2N 6EF.
ANNEX I
Pricing Information
The Company intends to reflect the following information related
to the Placing in the final prospectus dated 15 January 2019 (the
"Prospectus").
The latest practicable date in the Prospectus is 11 January
2019. Unless otherwise noted below, the relevant information as at
that date in the Prospectus remains unchanged from what was
included in the preliminary prospectus published on 9 January
2019.
Capitalised terms used but not otherwise defined herein are used
as defined in the Prospectus.
Pricing Information:
Number of Zegona Shares in issue as at
11 January 2019 126,219,449
Issue Price (per New Zegona Share) 105 pence
Number of New Zegona Shares to be issued
in connection with the Placing 95,715,728
Number of Zegona Shares to be in issue
immediately following Admission (with no
Zegona Shares held in treasury)(1) 221,935,177
New Zegona Shares as a percentage of Zegona's
outstanding issued share capital immediately
following Admission (with no Zegona Shares
held in treasury)(1) 43.13%
Gross proceeds of the Placing GBP100.5 million
Estimated expenses of the Transaction GBP4.6 million
Estimated net proceeds of the Placing receivable GBP95.9 million
by the Company
Notes:
(1) On the assumption that no further Zegona Shares are issued
(other than the New Zegona Shares) and the Company does not engage
in any share buy- back from the date of the Prospectus until
Admission.
The Barclays Facility, which provides funds of up to GBP30
million, to be reduced to GBP20 million if and to the extent the
Virgin Funding is drawn down, has been available since 14 January
2019 to fund the Euskaltel Share Acquisition, any fees and expenses
incurred in connection with the Transaction and for general
corporate purposes. The Barclays Facility may be drawn down between
14 January 2019 and 15 December 2019. Subject to the conditions set
out in the Prospectus, the Company intends to use GBP125.0 million,
representing the proceeds of the Placing and the funds expected to
be drawn down under the New Facilities less amounts required for
general corporate purposes and to pay fees, costs and expenses
related to the Transaction (the "Available Funds") to fund the
Euskaltel Share Acquisition.
For the 12 month period to 11 January 2019, the price per
Euskaltel share ranged from EUR6.44 (on 12 October 2018) to EUR8.25
(on 12 June 2018), with an arithmetic average of EUR7.37 over this
period.
At the current Euskaltel share price of EUR7.26 (being the
closing price at 11 January 2019), the Available Funds would not be
sufficient to increase Zegona's interest by 12.5%.
Dilution:
The issue of 95,715,728 New Zegona Shares will result in
Zegona's issued ordinary share capital increasing to 221,935,177
(on the basis of 126,219,449 Zegona Shares being in issue as at 11
January 2019 and assuming no further Zegona Shares are issued prior
to Admission and no buy-backs of Zegona Shares prior to Admission).
Immediately following Admission, holders of the New Zegona Shares
will hold approximately 43.13% of Zegona's issued ordinary share
capital (assuming Zegona does not issue any further Zegona Shares
or buy back any Zegona Shares from the date of the Prospectus until
Admission). As a result, the voting rights of Existing Zegona
Shareholders would be diluted, such that an Existing Zegona
Shareholder would, immediately following Admission, hold voting
rights of approximately 56.87% of the total voting rights that they
had held immediately prior to Admission (on the basis that such
Existing Zegona Shareholder does not participate in the Placing, no
further Zegona Shares are issued and there are no buy-backs of
Zegona Shares prior to Admission).
Assuming the issue of 95,715,728 New Zegona Shares, no other
issues of Zegona Shares between 11 January 2019, being the latest
practicable date prior to publication of the Prospectus, and
Admission and no buy-backs of Zegona Shares prior to Admission, the
Existing Zegona Shares will represent approximately 56.87% (on a
fully diluted basis) of the total issued Zegona Shares immediately
following Admission.
Existing Zegona Shareholders will suffer an immediate dilution
in their proportionate ownership and voting interests in Zegona
which will be reduced following Admission. Assuming there are no
other changes to Zegona's share capital between the date of the
Prospectus and Admission, existing Zegona Shareholders will suffer
dilution of approximately 43.13% to their shareholdings in the
Company as a result of the Euskaltel Share Acquisition.
Directors and Senior Managers interests:
As at 11 January 2019 (being the latest practicable date prior
to the publication of the Prospectus), the aggregate interests (all
of which are beneficial) of the Directors, senior managers and
persons closely associated with them in the share capital of the
Company, and which have been notified by each Director or senior
manager to the Company pursuant to Article 19 of the Market Abuse
Regulation and its predecessor legislation (in the case of persons
closely associated, so far as is known to the relevant Director or
senior manager or could with reasonable diligence be ascertained by
them), together with such interests as are expected to subsist
immediately following Admission, are set out below:
Interests immediately following Admission(1)
---------------------------- -----------------------------------------------
Director/senior manager(2) Number of Zegona Shares Percentage of issued
share capital
---------------------------- ------------------------ ---------------------
Eamonn O'Hare(3) 2,032,185 0.92%
Robert Samuelson(3) 657,853 0.30%
Murray Scott 66,147 0.03%
Richard Williams(4) 25,287 0.01%
Ashley Martin 10,479 0.00%
Mark Brangstrup Watts(5) - 0.00%
Howard Kalika 319,892 0.14%
Dean Checkley 4,216 0.00%
Menno Kremer - 0.00%
Notes:
(1) Assuming no Zegona Shares are issued prior to Admission
other than the New Zegona Shares and there are no buy- backs of
Zegona Shares prior to Admission.
(2) None of the Directors and senior managers are a Euskaltel shareholder.
(3) Eamonn O'Hare and Robert Samuelson also have interests in
Management Shares, details of which are set out in paragraph 4 of
Part XV (Additional Information).
(4) Richard Williams also holds a long position equivalent to
36,006 shares through a contract for difference.
(5) As at 11 January 2019, Marwyn, of which Mark Brangstrup
Watts is a Non-Executive Director, held 25.78% of the share capital
of the Company in its capacity as agent for and on behalf of its
discretionary managed clients.
Eamonn O'Hare, Robert Samuelson, Murray Scott and Howard Kalika
are also participating in the Placing.
Taken together, the Zegona Directors and senior managers will
have a combined percentage interest of approximately 1.40% in the
share capital of Zegona immediately following completion of the
Placing, assuming none of the Directors and senior managers
participate in the Placing.
Significant Shareholders:
The Company is only aware of the following persons who,
immediately following Admission, will represent an interest (within
the meaning of DTR Chapter 5) directly or indirectly, jointly or
severally in 3% or more of the Company's share capital or could
exercise control over the Company:
Interests as at 11 January Interests immediately
2019 following Admission(1)
---------------------- -------------------------------------- --------------------------------
Shareholder Number of Existing Percentage Number of Percentage
Zegona Shares of issued share Zegona Shares of issued
capital share capital
---------------------- ------------------- ----------------- --------------- ---------------
Marwyn (2) 32,538,225 25.78% 42,062,035 18.95%
Artemis Investment
Management
LLP - 0.00% 36,190,476 16.31%
Invesco Asset
Management 21,492,686 17.03% 30,064,114 13.55%
Fidelity Investments
Limited 12,621,944 10.00% 19,362,940 8.72%
Capital Research
& Management
Company 9,892,689 7.84% 17,705,431 7.98%
Legal & General
Investment
Management 9,001,149 7.13% 16,429,720 7.40%
AXA Investment
Managers 8,694,970 6.89% 11,094,970 5.00%
Canaccord Genuity
Group Inc 7,710,190 6.11% 20,670,043 9.31%
Taconic Capital
Advisers 6,134,710 4.86% 6,134,710 2.76%
Tekne Capital
Management
LLC 4,322,123 3.42% 4,322,123 1.95%
Notes:
(1) Based on holdings of such shareholders as at 11 January 2019
and assuming no further Zegona Shares are issued from the date of
the Prospectus until Admission (other than the New Zegona Shares)
and there are no buy- backs of Zegona Shares prior to
Admission.
(2) In its capacity as agent for and on behalf of its
discretionary managed clients. Mark Brangstrup Watts is a
Non-Executive Director of both the Company and Marwyn.
Financial effects of implementing the Euskaltel Share
Acquisition:
A significant factor affecting the Zegona Group's results of
operations in the future will be the financial impacts of
implementing the Euskaltel Share Acquisition and the increased
ownership in Euskaltel, which in turn will be heavily dependent on
four factors that are uncertain until after the Euskaltel Share
Acquisition has been completed, namely:
-- The price at which Zegona can acquire Euskaltel Shares through market purchases;
-- The price of the Euskaltel Shares immediately upon, and in
the period following, the completion of the Euskaltel Share
Acquisition and the number of Euskaltel Shares Zegona chooses to
buy;
-- The correct accounting treatment of the Zegona Group's investment in Euskaltel; and
-- Whether there are any material adjustments required to
conform Zegona's and Euskaltel's accounting policies.
Given the size of the investment in Euskaltel as a proportion of
the Zegona Group's net assets, the impact of these items will
almost certainly be material to the Zegona Group's financial
position and results of operations, and it is difficult to give a
meaningful estimate of the effects of implementing the Euskaltel
Share Acquisition.
Zegona will need to revisit its current conclusion on the
appropriate accounting treatment of the Zegona Group's investment
in Euskaltel in light of the results of the Euskaltel Share
Acquisition, and expects to conclude as a consequence of the
Euskaltel Share Acquisition either:
1. That it continues not to have significant influence over
Euskaltel and should continue to account for its investment as a
financial asset measured at fair value through profit or loss under
IFRS 9. If this is the case:
o The Zegona Group will continue to recognise its investment at
fair value. Assuming (a) the Euskaltel Share Acquisition had
happened on 1 January 2018, (b) Zegona was able to acquire 19.8
million Euskaltel Shares at a price of EUR7.00 per Euskaltel Share,
and (c) the Euskaltel share price both on completion of the
Euskaltel Share Acquisition and on 30 September 2018 was the same
as the assumed Euskaltel Share Acquisition price of EUR7.00 per
Euskaltel Share (the volume weighted average price from 21 December
2018 to 11 January 2019), this would result in an increase to the
Zegona Group's total assets as at 30 September 2018 of EUR144.6
million, representing EUR138.6 million of new shares and a gain of
EUR6.0 million on revaluing the existing 15% holding to the assumed
share price on the assumed completion date. This revaluation would
be recognised as finance income in the consolidated statement of
comprehensive income. There is no certainty that Zegona will be
able to acquire Euskaltel Shares at the volume weighted average
price of EUR7.00, and the Euskaltel share price was EUR7.26 on 11
January 2019.
o In 2018, Euskaltel paid total dividends of EUR0.278 per share
in two instalments, with an interim dividend of EUR0.127 per share
paid on 1 February 2018 and a final dividend of EUR0.151 per share
paid on 5 July 2018. Had the Zegona Group acquired 19.8 million
Euskaltel Shares as at 1 January 2018, the Zegona Group's dividend
income for the nine months to 30 September 2018 would have been
EUR13.0 million, an increase of EUR5.5 million.
o The Zegona Group's total assets would also have increased by
approximately EUR3.0 million, representing additional cash received
under the Placing and draw downs on the New Facilities, net of
estimated transaction fees paid of EUR5.2 million.
o Assuming Zegona drew down EUR30 million on the New Facilities
on 1 January 2018 (valued at EUR33.7 million as at 30 September
2018) and assuming a constant LIBOR rate of 0.9%, the Zegona Group
would have incurred finance costs of EUR1.3 million for the nine
months ended 30 September 2018, which would also have reduced total
assets.
o Therefore, the net increase to net assets would have been
EUR118.2 million and the net increase to profit would have been
EUR5.0 million as at and for the nine months ended 30 September
2018 if the Euskaltel Share Acquisition and Placing had taken place
on 1 January 2018 and based on the assumptions described above.
2. That it has significant influence over Euskaltel and will,
therefore, need to apply equity accounting to Euskaltel from the
date on which significant influence is gained. If this is the
case:
o The Zegona Group would recognise its interest in associate at
fair value on the date on which significant influence is gained,
which is deemed to be the acquisition cost of the investment.
Subsequently, the cost of the interest in associate is only
adjusted to recognise:
1. The Zegona Group's share of the profit or loss of the Euskaltel Group;
2. The Zegona Group's proportionate interest in the Euskaltel
Group arising from changes in the Euskaltel Group's other
comprehensive income; and
3. The dividends received from Euskaltel.
o Assuming (a) the Euskaltel Share Acquisition had happened on 1
January 2018, (b) Zegona was able to acquire 19.8 million Euskaltel
Shares at a price of EUR7.00 per Euskaltel Share, and (c) the
Euskaltel Share price both on completion of the Euskaltel Share
Acquisition and on 30 September 2018 was the same as the assumed
Euskaltel Share Acquisition price of EUR7.00 per Euskaltel Share
(the volume weighted average price from 21 December 2018 to 11
January 2019), this would result in an increase to the Zegona
Group's total assets as at 30 September 2018 of EUR144.6 million,
representing EUR138.6 million of new shares and a gain of EUR6.0
million on revaluing the existing 15% holding to the assumed share
price on the assumed completion date. There is no certainty that
Zegona will be able to acquire Euskaltel Shares at the volume
weighted average price of EUR7.00, and the Euskaltel share price
was EUR7.26 on 11 January 2019.
o In 2018, Euskaltel paid total dividends of EUR0.278 per share
in two instalments, with an interim dividend of EUR0.127 per share
paid on 1 February 2018 and a final dividend of EUR0.151 per share
paid on 5 July 2018. Had Zegona acquired 19.8 million Euskaltel
Shares as at 1 January 2018, dividends received by the Zegona Group
for the nine months to 30 September 2018 would have been EUR13.0
million and this would have decreased the carrying value of the
interest in associate, and cash would have increased by EUR5.5
million.
o The Euskaltel Group reported total net income for the nine
months ended 30 September 2018 of EUR46.6 million. Assuming (a) no
adjustments are required to conform Euskaltel's accounting policies
to Zegona's, (b) the Euskaltel Group had recognised no material
amounts within other comprehensive income, (c) the Euskaltel Share
Acquisition had happened on 1 January 2018 and (d) Zegona acquired
19.8 Euskaltel Shares, this would result in income of EUR12.2
million being recognised within share of profit of associate for
the nine months ended 30 September 2018 and an increase in the
carrying value of the interest in associate.
o The Zegona Group's total assets would also have increased by
approximately EUR3.0 million, representing additional cash received
under the Placing and draw downs on the New Facilities, net of
estimated transaction fees paid of EUR5.2 million.
o Assuming Zegona drew down EUR30 million on the New Facilities
on 1 January 2018 (valued at EUR33.7 million as at 30 September
2018) and assuming a constant LIBOR rate of 0.9%, the Zegona Group
would have incurred finance costs of EUR1.3 million for the nine
months ended 30 September 2018, which would also have reduced total
assets.
o Therefore, the net increase to net assets would have been
EUR117.4 million and the net increase to profit would have been
EUR4.2 million as at and for the nine months ended 30 September
2018 if the Euskaltel Share Acquisition and Placing had taken place
on 1 January 2018 and based on the assumptions described above.
o If it is concluded that the investment in Euskaltel is an
associate, Zegona will also need to test the carrying value of the
investment in Euskaltel for impairment.
Timetable of events
Execution of the Placing Agreement, Barclays 14 January 2019
Facility and the Virgin Facility
Expected date of finalisation of number 14 January 2019
of New Zegona Shares to be issued pursuant
to the Placing
Publication of the Circular and Prospectus 14 January 2019
Latest time and date for receipt of Forms 10 a.m. on 5 February
of Proxy and CREST Proxy Instructions for 2019
the General Meeting
Record Time for those Shareholders on the 6 p.m. on 5 February
Register of Members 2019
entitled to attend or vote at the General
Meeting
General Meeting 10 a.m. on 7 February
2019
Admission of the New Zegona Shares 8 a.m. on 11 February
2019
New Zegona Shares expected to be issued 11 February 2019
and credited to CREST accounts
All references are to London times unless otherwise stated. The
dates and times given are indicative only and are based on the
Company's current expectations and may be subject to change. If any
of the times and/or dates above change, the revised times and/or
dates will be notified to Shareholders by announcement through a
regulatory information service.
Additional Information
On 19 October 2018, Zegona announced its intention to make a
partial tender offer to acquire up to approximately 14.9% of
Euskaltel's outstanding issued ordinary share capital as at the
date of the announcement at a price of EUR7.75 per share (the
"Proposed Tender Offer"). However, given the deterioration in
equity market conditions at the end of 2018, the Directors believe
that the terms available to finance the acquisition of the full
14.9% of Euskaltel to be sought in the Proposed Tender Offer would
not have been acceptable to Zegona Shareholders, including because
the equity funding required would have been overly dilutive. As the
Company was informed that it was not permitted under Spanish law to
reduce the maximum size of the Proposed Tender Offer, Zegona
announced on 21 December 2018 that it no longer intended to proceed
with the Proposed Tender Offer.
Robert Samuelson and Jon James were both appointed to the board
of Euskaltel with effect from 26 July 2017.
MásMóvil acquired Yoigo and Pepephone in September 2016.
On 14 January 2019, Zegona entered into a Shareholder
Relationship Agreement with Talomon, an experienced TMT and
telecommunications sector investor. Talomon is a current
shareholder in both Euskaltel and Zegona and, pursuant to the
Shareholder Relationship Agreement, has agreed formally to support
Zegona's strategy as described in the Prospectus.
The unaudited condensed consolidated interim financial
statements of Zegona Communications plc and its subsidiaries for
the nine months ended 30 September 2018 were authorised for issue
in accordance with a resolution of the directors of Zegona on 13
January 2019.
The Zegona Group intends to adopt the following standards,
amendments and interpretations, if applicable, when they become
effective. Adopting these standards will not have a material impact
on the Zegona Group:
Standard Effective date
IFRS 14 Regulatory Deferral 1 January 2016*
Accounts
------------------
IFRS 16 Leases 1 January 2019
------------------
IFRIC 23 Uncertainty over Income 1 January 2019
Tax Treatments
------------------
Amendments to IFRS 9: Prepayment 1 January 2019
Features with Negative Compensation
------------------
Amendments to IAS 19: Plan 1 January 2019**
Amendment, Curtailment or Settlement
------------------
Amendments to IAS 28: Long-term 1 January 2019**
Interests in Associates and
Joint Ventures
------------------
Amendments to IFRS 3 Business 1 January 2020**
Combinations
------------------
Amendments to IAS 1 and IAS 1 January 2020**
8: Definition of Material
------------------
IFRS 17 Insurance Contracts 1 January 2021**
------------------
*the EU has decided not to endorse the interim standard and
to wait for the final standard
** subject to EU endorsement
At the General Meeting, Zegona Shareholders will be asked to
consider and, if thought fit, to pass the following
resolutions:
Subject to and conditional upon Admission:
-- the Directors be generally and unconditionally authorised in
accordance with section 551 of the Act to allot the New Zegona
Shares at a price of 105 pence per New Zegona Shares up to an
aggregate nominal amount of GBP957,157.28 such authority to expire
on 31 May 2019; and
-- the Directors be empowered pursuant to section 570 of the Act
to allot equity securities (as defined in section 560 of the Act)
for cash, pursuant to the authority conferred on them to allot such
shares or grant such rights by resolution 1 above, as if
sub-section (1) of section 561 of the Act did not apply to any such
allotment such authority to expire on 31 May 2019.
In connection with the Placing, and under the terms of the
Placing Agreement, the Company has agreed to pay: (i) Barclays on
Admission an underwriting commission of 2.0% of the product of the
New Zegona Shares and the Issue Price, plus an additional
commission in the sole discretion of the Company of 0.25% of the
product of the New Zegona Shares and the Issue Price; and (ii)
Oakley on Admission a commission of 0.6% of the product of the New
Zegona Shares and the Issue Price. The Company and Barclays agreed
no commitment fee will be payable at Admission with respect to the
standby underwriting letter.
The Company intends to enter into a stakebuild instruction
letter with Barclays (the "Barclays Stakebuild Instruction Letter")
whereby Barclays will be appointed to assist the Company in
executing the Euskaltel Share Acquisition. The Barclays Stakebuild
Instruction Letter is expected to continue in effect until 6 months
from the date of the letter and may be terminated by either party
at any time by written notice.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ROILLFLDLTISLIA
(END) Dow Jones Newswires
January 14, 2019 12:21 ET (17:21 GMT)
Zegona Communications (LSE:ZEG)
Historical Stock Chart
From Apr 2024 to May 2024
Zegona Communications (LSE:ZEG)
Historical Stock Chart
From May 2023 to May 2024