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Zegona raises capital for Euskaltel share purchases

Cable and telecom investor Zegona Communications has successfully completed its share placing, raising gross proceeds of approximately £100.5 million (€112.6 million).

The share placement represents about 75.8% of UK-based Zegona’s issued ordinary share capital prior to the placing.

The company plans to use the capital raised to make new purchases of shares in Spanish regional cable operator Euskaltel, in which it is a minority shareholder.

The placement follows Zegona’s decision to withdraw a tender offer to acquire an additional 14.9% of Euskaltel and focus on increasing its ownership position up to a maximum of 12.5% through open market purchases. Zegona has also struck an agreement with Zegona and Euskaltel shareholder Talomon Capital, giving the latter an entitlement of up to 2.4% in Euskaltel.

In addition to its share placement, Zegona has also entered into agreement with Virgin Group and Barclays Banks to draw up to £30 million in debt to supplement the equity placement.

Zegona currently holds a 15% stake in Euskaltel following the merger of the latter with Zegona-owned Asturias region operator Telecable.