THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to what action you should take you are recommended to seek your own financial advice immediately from an independent financial adviser who specialises in advising on shares or other securities and who is authorised under the Financial Services and Markets Act 2000.

This document comprises a prospectus (the “Prospectus“) for the purposes of Article 3 of the UK version of Regulation (EU) 2017/1129, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018 (the “Prospectus Regulation“), relating to Zegona Communications plc (the “Company” or “Zegona“, and including its subsidiaries, the “Zegona Group“) prepared in accordance with the Prospectus Regulation Rules (the “Prospectus Regulation Rules“) of the Financial Conduct Authority (the “FCA“) made under section 73A of the Financial Services and Markets Act 2000, as amended (“FSMA“). A copy of this Prospectus has been filed with, and approved on 13 November 2023 by, the FCA as competent authority under the Prospectus Regulation, and has been made available to the public in accordance with the Prospectus Regulation Rules. This document does not constitute a prospectus for the purposes of any offer of shares in any EEA member state and has not been approved by a competent authority in any EEA member state for the purposes of Regulation (EU) 2017/1129 (the “EU Prospectus Regulation“).

The FCA only approves this Prospectus as meeting the standards of completeness, comprehensibility and consistency imposed by the Prospectus Regulation. Such approval should not be considered as an endorsement of the Company that is, or the quality of the securities that are, the subject of this Prospectus. Investors should make their own assessment as to the suitability of investing in the securities.

The Company and each of the Directors, whose names appear in paragraph 1.1 of Part XII (Directors, Corporate Governance and Employees) of this Prospectus, accept responsibility for the information contained in this Prospectus. To the best of the knowledge of the Company and the Directors, the information contained in this Prospectus is in accordance with the facts and this Prospectus makes no omission likely to affect its import.

Prospective investors should read this Prospectus in its entirety. In particular, your attention is drawn to the risk factors set out in Part II (Risk Factors) of this Prospectus for a discussion of the risks that might affect the value of your shareholding in the Company. Investment in the Zegona Shares is only suitable for investors who are particularly knowledgeable in investment matters and who are able to bear the loss of the whole or part of their investment.

Zegona Communications plc

(Incorporated and registered in England and Wales with number 09395163)

Proposed Acquisition of Vodafone Holdings Europe S.L.U. (“Vodafone Spain“)

Admission of New Zegona Shares and re-admission of Zegona Shares to the standard listing segment of the

Official List and to trading on the London Stock Exchange’s Main Market for listed securities

Global Co-ordinator and Joint Bookrunner

Deutsche Numis

Joint Bookrunners

Canaccord Genuity Limited

ING Bank N.V.

UniCredit Bank AG, Milan Branch

The Existing Zegona Shares are listed on the standard listing segment of the Official List and traded on the main market for listed securities (the “Main Market“). Applications will be made to the FCA for admission of the New Zegona Shares to the standard listing segment of the Official List and to the London Stock Exchange for admission of the New Zegona Shares to trading on the Main Market (“Admission“). It is expected that Admission will become effective, and that dealings in the New Zegona Shares will commence, at 8.00 a.m. on 17 November 2023.

As the Acquisition is classified as a reverse takeover under the Listing Rules, upon completion of the Acquisition (“Completion“) the admission of all the Zegona Shares in issue immediately prior to Completion to the standard listing segment of the Official List and to trading on the Main Market will be cancelled and applications will be made to the FCA and the London Stock Exchange, respectively, for re-admission of those Zegona Shares, including the New Zegona Shares, to the standard listing segment of the Official List and to trading on the Main Market (“ReAdmission “). It is expected that Re-Admission will become effective, and that dealings in the Zegona Shares will commence, at 8.00 a.m. on the day of Completion (whereupon an announcement will be made by the Company to a Regulatory Information Service).

A standard listing affords investors in the Company a lower level of regulatory protection than that afforded to investors in companies whose securities are admitted to the premium segment of the Official List, which are subject to additional obligations under the Listing Rules. As the Company is admitted to the standard listing segment of the Official List, it is not eligible for inclusion in FTSE indices.

The New Zegona Shares have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act“), or with any securities regulatory authority of any state or other jurisdiction of the United States. The New Zegona Shares will be offered (i) in the United States only to qualified institutional buyers (“QIBs“) as defined in Rule 144A under the U.S. Securities Act (“Rule 144A“), that are also qualified purchasers (“QPs“) as defined in Section 2(a)(51) of the U.S. Investment Company Act of 1940, as amended (the “U.S. Investment Company


Act“), who have each executed and delivered to the Joint Bookrunners a U.S. Investor Letter, in transactions that are exempt from, or not subject to, the registration requirements of the U.S. Securities Act, and (ii) to non-U.S. Persons (as defined in Regulation S under the U.S. Securities Act) in “offshore transactions” to non-U.S. Persons as defined in, and in reliance on, Regulation S. There has not been and will be no public offer of the New Zegona Shares in the United States. The New Zegona Shares will be subject to limitations on transfer as described in Part XIX (The Offer). Moreover, the Company has not been and will not be registered under the U.S. Investment Company Act and investors will not be entitled to the benefits of the U.S. Investment Company Act. No offer, purchase, sale or transfer of the New Zegona Shares may be made except under circumstances which will not result in the Company being required to register as an investment company under the U.S. Investment Company Act. Prospective investors are hereby notified that sellers of the New Zegona Shares may be relying on the exemption from the provisions of Section 5 of the U.S. Securities Act provided by Rule 144A under the U.S. Securities Act.

Unless otherwise expressly agreed with the Company, each initial subscriber and/or purchaser and subsequent transferee of New Zegona Shares will be required to represent and warrant or will be deemed to represent and warrant that it is not a “benefit plan investor” (as defined in Section 3(42) of the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA“)), and that it is not, and is not using assets of, a plan or other arrangement subject to provisions under applicable federal, state, local, non-U.S. or other laws or regulations that are substantially similar to Section 406 of ERISA or Section 4975 of the U.S. Tax Code unless its purchase, holding and disposition of New Zegona Shares does not constitute or result in a non-exempt violation of any such substantially similar law.

Prospective investors should be aware that the Company was likely treated as a passive foreign investment company (a “PFIC“) for U.S. federal income tax purposes for the taxable year 2022 and expects to be a PFIC for the taxable year ending 31 December 2023 and subsequent taxable years unless the completion of the Acquisition occurs. The Company does not expect to be a PFIC after completion of the Acquisition based on the expected income and assets of the Zegona Group, as at and from Completion, as enlarged by Vodafone Spain (the “Enlarged Group“). If the Company were a PFIC for any taxable year during which a prospective investor that is a U.S. person owns Zegona Shares, such prospective investor may be subject to adverse consequences unless certain elections are made. For further details, see “Certain U.S. Federal Income Tax Considerations” in Part XVIII (Taxation).

No actions have been taken to allow a public offering of the New Zegona Shares under the applicable securities laws of any jurisdiction, including Australia, Canada, Japan or South Africa. Subject to certain exceptions, the New Zegona Shares may not be offered or sold in any jurisdiction, or to or for the account or benefit of any national, resident or citizen of any jurisdiction, including Australia, Canada, Japan and South Africa. This Prospectus does not constitute an offer of, or the solicitation of an offer to subscribe for or purchase, any of the New Zegona Shares to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation in such jurisdiction.

The New Zegona Shares have not been approved or disapproved by the U.S. Securities and Exchange Commission (the “SEC“), any state securities commission in the United States or any other U.S. regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offer of New Zegona Shares referred to in this Prospectus or the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offence in the United States.

‘Deutsche Numis’ is a trading name used by certain investment banking businesses of Deutsche Bank AG (“Deutsche Bank“), Numis Securities Limited and Numis Europe Limited in the United Kingdom and Ireland, Numis Securities Limited and Numis Europe Limited are members of the group of companies controlled by Deutsche Bank AG. Deutsche Bank AG is a stock corporation (Aktiengesellschaft) incorporated under the laws of the Federal Republic of Germany, with its principal office in Frankfurt. It is registered with the district court (Amtsgericht) in Frankfurt am Main under No HRB 30 000 and licensed to carry on banking business and to provide financial services. The London branch of Deutsche Bank AG is registered in the register of companies for England and Wales (registration number BR000005) with its registered address and principal place of business at Winchester House, 1 Great Winchester Street, London EC2N 2DB. Deutsche Bank AG subject to supervision by the European Central Bank (ECB), Sonnemannstrasse 22, 60314, Frankfurt am Main, Germany, and the German Federal Financial Supervisory Authority Bundesanstalt für Finanzdienstleistungsaufsicht or BaFin), Graurheindorfer Strasse 108, 53117 Bonn and Marie-Curie-Strasse24-28, 60439 Frankfurt am Main, Germany. With respect to activities undertaken in the United Kingdom, Deutsche Bank AG is authorised by the Prudential Regulatory Authority (the “PRA“). It is subject to regulation by the FCA and limited regulation by the PRA. Details about the extent of Deutsche Bank AG’s authorisation and regulation by the PRA are available from Deutsche Bank AG on request. Numis Securities Limited is authorised and regulated by the Financial Conduct Authority in the United Kingdom. Numis Europe Limited trading as Numis is regulated by the Central Bank of Ireland. Canaccord Genuity Limited (“Canaccord“) is authorised and regulated by the FCA in the United Kingdom. ING Bank N.V. (“ING“) is supervised by the European Central Bank (ECB). The Dutch Central Bank (De Nederlandsche Bank) and the Netherlands Authority for the Financial Markets (AFM). UniCredit Bank AG is a universal bank with its registered office and principal place of business in Arabellastrasse 12, Munich, Germany. It is entered under HRB 42148 in the B section of the Commercial Register Maintained by Munich Local Court. UniCredit Bank AG is an affiliate of UniCredit S.p.A., Milan, Italy (ultimate parent company). UniCredit Bank AG is subject to regulation by the European Central Bank and Federal Financial Supervisory Authority (BaFin). UniCredit Bank AG, Milan Branch (“UniCredit“) is regulated by Banca d’Italia, the Commissione Nazionale per le Società la Borsa (CONSOB) and the Federal Financial Supervisory Authority (BaFin). Details about the extent of UniCredit Bank AG’s regulation are available on request.

Deutsche Bank AG, acting through its London branch (which is trading for these purposes as Deutsche Numis)

(“Deutsche Numis” or the “Global Co-ordinator“) has been appointed as global co-ordinator and joint bookrunner. Canaccord, ING and UniCredit have been appointed as joint bookrunners (together with the Global Co-ordinator (the “Joint Bookrunners“). Each Joint Bookrunner is acting exclusively for the Company and no one else in connection with the institutional placing of New Zegona Shares (the “Placing“) and will not regard any other person (whether or not a recipient of this Prospectus) as a client in relation to the Placing, Admission or Re-Admission and is not, and will not be, responsible to anyone other than the Company for providing the protections afforded to its clients or for giving advice in relation to the Placing, Admission, Re-Admission or any transaction, matter or arrangement referred to in this Prospectus. None of the Joint Bookrunners is acting for the Company with respect to the PrimaryBid Offer.

Apart from the responsibilities and liabilities, if any, which may be imposed on the Joint Bookrunners by the FSMA or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, neither the Joint Bookrunners nor any of its affiliates, directors, officers, employees or advisers accepts any responsibility whatsoever for, or makes any representation or warranty, express or implied, as to, the contents of this Prospectus, including its accuracy, completeness, verification sufficiency or for any other statement made or purported to be made by it, or on behalf of it, the Company, the directors or any other person, in connection with the Company, the New Zegona Shares, the offer of New Zegona Shares referred to in this Prospectus, Admission or Re-Admission, and nothing in this Prospectus should be relied upon as a promise or representation in this respect, whether or not to the past or future. Each Joint Bookrunner and its affiliates, directors, officers, employees and advisers accordingly disclaims to the fullest extent permitted by law any responsibility or liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of this Prospectus or any such statement.

Available information for investors in the United States

For so long as any of the New Zegona Shares are in issue and are “restricted securities” within the meaning of Rule 144(a)(3) under the U.S. Securities Act, the Company will, during any period in which it is not subject to section 13 or 15(d) under the U.S. Securities Exchange Act of 1934, as amended (the “U.S. Exchange Act“), nor exempt from reporting under the U.S. Exchange Act pursuant to Rule 12g3-2(b) thereunder, make available to any holder or beneficial owner of a New Zegona Share, or to any prospective purchaser of a New Zegona Share designated by such holder or beneficial owner, the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the U.S. Securities Act.

Notice to Canadian investors

This document constitutes an “exempt offering document” as defined in and for the purposes of applicable Canadian securities laws. No prospectus has been filed with any securities commission or similar regulatory authority in Canada in connection with the offer and sale of the New Zegona Shares. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed upon this document or on the merits of the New Zegona Shares and any representation to the contrary is an offence.

The New Zegona Shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions (“NI 45-106“) or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103Registration Requirements, Exemptions and Ongoing Registrant Obligations (“NI 31-103“) and that are not created or used solely to purchase or hold securities as an accredited investor described in paragraph (m) of the definition of “accredited investor”.

Canadian investors are advised that this document has been prepared in reliance on section 3A.3 of National Instrument 33-105 Underwriting Conflicts (“NI 33-105“). Pursuant to section 3A.3 of NI 33-105, this document is exempt from the requirement that the issuer and the underwriters in the offering provide Canadian investors with certain conflicts of interest disclosure pertaining to “connected issuer” and/or “related issuer” relationships as would otherwise be required pursuant to subsection 2.1(1) of NI 33-105.

Securities legislation in certain provinces or territories of Canada may provide Canadian investors with remedies for rescission or damages if an “offering memorandum” such as this document (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for the particulars of these rights or consult with a legal advisor.

Upon receipt of this document, each Canadian investor hereby confirms that it has expressly requested that all documents evidencing or relating in any way to the sale of the New Zegona Shares described herein (including for greater certainty any purchase confirmation or any notice) be drawn up in the English language only. Par la réception de ce document, chaque investisseur canadien confirme par les présentes qu’il a expressément exigé que tous les documents faisant foi ou se rapportant de quelque manière que ce soit à la vente des valeurs mobilières décrites aux présentes (incluant, pour plus de certitude, toute confirmation d’achat ou tout avis) soient rédigés en anglais seulement.

No incorporation of website information

The contents of the Company’s and the Vodafone Group plc’s (“Vodafone Group“) websites, including any hyperlinks

to or from such websites, do not form part of this Prospectus, unless specifically incorporated by reference.

Copies of this Prospectus are available, subject to certain access restrictions, on the “Investors” section of the Company’s website at www.zegona.com and are also available for collection free of charge during normal business hours on any weekday (except Saturdays and public holidays) at the offices of the Company, 8 Sackville Street, London, W1S 3DG from the date of this Prospectus, and shall remain available for a period of one month from Admission.

Notice to Distributors – UK Product Governance

Solely for the purposes of the product governance requirements of Chapter 3 of the FCA Handbook Product Intervention and Product Governance Sourcebook (the “UK Product Governance Requirements“) and/or any equivalent requirements elsewhere to the extent determined to be applicable, and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the UK Product Governance Requirements and/or any equivalent requirements elsewhere to the extent determined to be applicable) may otherwise have with respect thereto, the New Zegona Shares have been subject to a product approval process, which has determined that the New 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 defined in Chapter 3 of the FCA Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all permitted distribution channels (the “UK Target Market Assessment“). Notwithstanding the UK Target Market Assessment, distributors should note that: the price of the New Zegona Shares may decline and investors could lose all or part of their investment; the New Zegona Shares offer no guaranteed income and no capital protection; and an investment in the New 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 UK 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 UK Target Market Assessment, the Joint Bookrunners have only procured investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the UK Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapters 9A or 10A respectively of the FCA Handbook Conduct of Business Sourcebook; 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 New Zegona Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the New Zegona Shares and determining appropriate distribution channels.

Notice to Distributors – EU Product Governance

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/or any equivalent requirements elsewhere to the extent determined to be applicable, 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 and/or any equivalent requirements elsewhere to the extent determined to be applicable) may otherwise have with respect thereto, the New Zegona Shares have been subject to a product approval process, which has determined that the New 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 “EU Target Market Assessment“). Notwithstanding the EU Target Market Assessment, Distributors should note that: the price of the New Zegona Shares may decline and investors could lose all or part of their investment; the New Zegona Shares offer no guaranteed income and no capital protection; and an investment in the New 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 EU 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 EU Target Market Assessment, the Joint Bookrunners will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the EU 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 New Zegona Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the New Zegona Shares and determining appropriate distribution channels.

Date

This Prospectus is dated 13 November 2023.

This Prospectus speaks only as of the date hereof.

CONTENTS

PART I. SUMMARY


1

PART II. RISK FACTORS

8

PART III. CONSEQUENCES OF A STANDARD LISTING

33

PART IV. IMPORTANT INFORMATION

34

PART V. EXPECTED TIMETABLE OF PRINCIPAL EVENTS

43

PART VI. INDICATIVE STATISTICS

44

PART VII. DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS

45

PART VIII. INFORMATION ABOUT THE TRANSACTION

47

PART IX. INFORMATION ON ZEGONA

71

PART X. INFORMATION ON VODAFONE SPAIN

74

PART XI. VODAFONE SPAIN INDUSTRY OVERVIEW

84

PART XII. DIRECTORS, CORPORATE GOVERNANCE AND EMPLOYEES

92

PART XIII. HISTORICAL FINANCIAL INFORMATION

97

PART XIV. OPERATING AND FINANCIAL REVIEW OF THE ZEGONA GROUP

157

PART XV. OPERATING AND FINANCIAL REVIEW OF VODAFONE SPAIN

159

PART XVI. UNAUDITED PRO-FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP….

179

PART XVII. CAPITALISATION AND INDEBTEDNESS

186

PART XVIII. TAXATION

189

PART XIX. THE OFFER

199

PART XX. ADDITIONAL INFORMATION

207

PART XXI. DOCUMENTS INCORPORATED BY REFERENCE

230

PART XXII. DEFINITIONS, ABBREVIATIONS AND GLOSSARY

232

PART I. SUMMARY

Section A – Introduction and warnings

A.1 – Introduction

The name of the Company is Zegona Communications plc (the “Company” or “Zegona“, and including its subsidiaries, the “Zegona Group“) and the ISIN of the existing Zegona ordinary shares (the “Existing Zegona Shares“) is GB00BVGBY890. The Company’s registered office is 8 Sackville Street, London, England, United Kingdom, W1S 3DG (tel: +44 20 3004 2017).

The Financial Conduct Authority of 12 Endeavour Square, London E20 1JN approved this Prospectus on 13 November 2023.

A.2 – Warnings

This summary should be read as an introduction to this Prospectus. Any decision to invest in the securities should be based on consideration of this Prospectus as a whole by the investor.

The price of the Zegona Shares may fluctuate in response to a number of factors, many of which may be out of the Company’s control, and investors could lose all or part of their investment. Investors should consider carefully whether an investment in the Zegona Shares is suitable for them in the light of the information in this Prospectus and their personal circumstances.

Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of this Prospectus or it does not provide, when read together with the other parts of this Prospectus, key information in order to aid investors when considering whether to invest in such securities.

Section B – Key information on the issuer

Section B(1) – Who is the issuer of the securities?

B.1.1 Legal and commercial name and LEI

The name of the Company is Zegona Communications plc. The Company’s Legal Entity Identifier (“LEI“) is 213800ASI1VZL2ED4S65.

B.1.2 Domicile, legal form, legislation and country of incorporation

The Company is incorporated in England and Wales under the Companies Act 2006 (the “Companies Act“) with registration number 09395163 and domiciled in the United Kingdom and operates under English law. It is subject to the City Code.

B.1.3 Principal activities

The Company was established in 2015 with the objective of investing in businesses in the European technology, media, and telecom (“TMT“) sector and improving their performance to deliver attractive shareholder returns. Pursuant to an acquisition agreement dated 31 October 2023, the Company through one of its newly incorporated subsidiaries has conditionally agreed to acquire Vodafone Spain (the “Acquisition“).

The business of Vodafone Spain, previously known as Airtel Móvil, began operating in 1995 and is a well-diversified telecommunications operator across fixed-line, mobile, TV and digital market segments in Spain. Following completion of the Acquisition (“Completion“), the Enlarged Group will continue to operate the same business.

B.1.4 Major shareholders

The Company is only aware of the following persons who, immediately following Admission and Re-Admission, will represent an interest (within the

meaning of DTR Chapter 5) directly or indirectly, jointly or severally in 3 per cent. or more of the Company’s share capital or could exercise control over

the Company:

Interests immediately following

Interests as at 10 November 2023

Admission and Re-Admission(1)

Percentage of

Number of Existing Zegona

Percentage of

Number of Zegona

issued share

Shareholder

Shares

issued share capital

Shares

capital

Zegona board and management(2)

1,694,401

27.45%

1,734,400

0.24%

Marwyn Investment Management LLP

774,321

12.54%

6,004,321

0.85%

Artemis Investment Management

586,691

9.51%

586,691

0.08%

Fidelity Management & Research

403,107

6.53%

24,563,907

3.47%

Fidelity Investments Limited

392,349

6.36%

392,349

0.06%

Aberforth Partners LLP

243,744

3.95%

10,909,744

1.54%

Credit Suisse

234,469

3.80%

234,469

0.03%

Winterflood Securities

205,014

3.32%

205,014

0.03%

Petrus Advisers

200,661

3.25%

200,661

0.03%

EJLSHM Funding Limited(3)

–

–

523,240,603

73.85%

Thornburg Investment Management

–

–

32,576,000

4.60%

Alken Asset Management

–

–

29,068,000

4.10%

Total

4,734,757

76.71%

629,716,159

88.88%

Note


  1. Assuming the maximum number of New Zegona Shares are subscribed for in the PrimaryBid Offer (and none of the above persons participates in the PrimaryBid Offer (other than Richard Williams or Ashley Martin, and assuming they receive their full allocation in the PrimaryBid Offer) or acquires or disposes of any Zegona Shares prior to     Re-Admission) and the Company does not issue, or undertake any buybacks of, Zegona Shares prior to Re-Admission.
  2. Richard Williams has confirmed his intention to subscribe for approximately £40,000 of New Zegona Shares in the PrimaryBid Offer and Ashley Martin has confirmed his intention to subscribe for approximately £20,000 of New Zegona Shares in the PrimaryBid Offer.

  3. EJLSHM Funding Limited has irrevocably undertaken to Zegona and the Preference Shareholder not to vote the Zegona Shares it holds (other than in connection with a takeover where the consideration is cash).

B.1.5 Key managing directors

The Company’s Board is composed of Eamonn O’Hare (Chairman and Chief Executive Officer), Robert Samuelson (Chief Operating Officer), Ashley Martin (Independent Non-Executive Director), Richard Williams (Independent Non-Executive Director) and Suzi Williams (Independent Non-Executive Director). Zegona intends to propose the appointment of José Miguel García as CEO of Vodafone Spain following Completion (which is subject to contract and any discussions on terms).

B.1.6 Statutory auditors

The statutory auditors of the Company are KPMG LLP of 15 Canada Square, London E14 5GL.

Section B(2) – What is the key financial information regarding the issuer?

The tables below set out the key summary financial information regarding the issuer and Vodafone Spain.

Zegona

The table below sets out the summary financial information of Zegona for the three financial years ended 31 December 2020, 2021 and 2022 and the six-month periods ended 30 June 2022 and 2023. The information has been prepared in accordance with UK adopted international accounting standards (“IFRS“).

Summary Consolidated Statement of Comprehensive Income

Six months ended

Year ended

30 June 2023

30 June 2022

31 December 2022

31 December 2021

31 December 2020

€’000

(unaudited)

Continuing Operations

Administrative and other operating expenses:

Corporate costs

(1,691)

(1,834)

(3,271)

(4,643)

(5,631)

Management Incentive Scheme costs

(35)

(34)

(34)

(29,072)

(914)

Significant project costs

(55)

(26)

(26)

(295)

(292)

Operating loss

(1,781)

(1,894)

(3,331)

(34,010)

(6,837)

Finance income

12

–

25

158

29

Finance costs

(3)

–

(4)

(376)

(310)

Net foreign exchange (loss) / gain

(2)

–

(3)

(30)

1,273

(Loss) for the period before income tax

(1,774)

(1,894)

(3,313)

(34,258)

(5,845)

Income tax expense

–

–

–

–

–

(Loss) for the period

(1,774)

(1,894)

(3,313)

(34,258)

(5,845)

Discontinued Operations

Profit for the period from discontinued operation, net of tax

–

–

–

114,171

19,811

(Loss)/Profit for the period attributable to equity holders of the parent

(1,774)

(1,894)

(3,313)

79,913

13,966

Summary Consolidated Statement of Financial Position

As at

As at

30 June 2023

31 December 2022

31 December 2021

31 December 2020

€’000

(unaudited)

Total non-current assets

5,128

4,974

5,264

322,749

Total current assets

4,356

5,965

10,753

22,952

Total assets

9,484

10,939

16,017

345,701

Total equity attributable to equity holders of the Parent

9,157

10,537

14,454

332,451

Total liabilities

327

402

1,563

13,250

Total equity and liabilities

9,484

10,939

16,017

345,701

Summary Consolidated Statement of Cash Flows

Six months ended

Year ended

30 June 2023

30 June 2022

31 December

31 December

31 December

2022

2021

2020

€’000

(unaudited)

(Loss) before income tax from continuing operations

(1,774)

(1,894)

(3,313)

(34,258)

(5,845)

Net cash flows used in operating activities

(1,780)

(2,613)

(3,916)

(39,142)

(7,059)

Net cash flows used in investing activities

–

–

–

(34)

(13)

Net cash flows from discontinued investing activities

–

–

–

439,547

10,152

Net cash flows (used in) financing activities

–

412

(106)

(408,770)

(14,947)

Cash and cash equivalents at 1 January

5,890

10,556

10,556

15,244

27,035

Cash and cash equivalents at the end of the year/period

4,307

8,169

5,890

10,556

15,244

Vodafone Spain

The table below sets out the summary financial information of Vodafone Spain for the three financial years ended 31 March 2021, 2022 and 2023 and

the three-month periods ended 30 June 2022 and 2023.

Summary Consolidated Statement of Comprehensive Loss

Three months ended

Year ended

30 June 2023

30 June 2022

31 March 2023

31 March 2022

31 March 2021

€’000

(unaudited)

Revenue

964,782

987,527

3,906,713

4,180,058

4,166,421

Supplies

(260,102)

(287,331)

(1,079,518)

(1,101,587)

(1,088,421)

Corporate costs

(71,130)

(69,192)

(257,968)

(347,194)

(282,319)

Other expenses

(293,276)

(259,971)

(996,310)

(1,132,738)

(1,075,098)

Net credit losses on financial assets

(24,303)

(31,200)

(34,862)

(115,484)

(125,855)

Depreciation, amortisation and impairment losses

(410,789)

(416,782)

(1,632,634)

(1,707,815)

(1,655,230)

Operating loss

(94,818)

(76,949)

(94,579)

(224,760)

(60,502)

Finance income

14

26

15,685

13,053

–

Finance costs

(48,599)

(19,774)

(119,377)

(67,808)

(78,182)

Loss for the period before income tax

(143,403)

(96,697)

(198,271)

(279,515)

(138,684)

Income tax credit

–

–

169

30,989

17,161

Loss for the period attributable to equity holders of the parent

(143,403)

(96,697)

(198,102)

(248,526)

(121,523)

Summary Consolidated Statement of Financial Position

As at

As at

30 June 2023

31 March 2023

31 March 2022

31 March 2021

€’000

(unaudited)

Total non-current assets

5,926,813

6,011,463

6,440,816

6,452,481

Total current assets

818,096

1,081,647

1,026,280

1,118,627

Total assets

6,744,909

7,093,110

7,467,096

7,571,108

Total equity attributable to equity holders of the parent

692,654

835,779

1,036,283

1,287,849

Total non-current liabilities

4,453,388

4,465,867

4,476,871

4,268,560

Total current liabilities

1,598,867

1,791,464

1,953,943

2,014,699

Total equity and liabilities

6,744,909

7,093,110

7,467,096

7,571,108

Summary Consolidated Statement of Cash Flows

Three months ended

Year ended

30 June 2023

30 June 2022

31 March 2023

31 March 2022

31 March 2021

€’000

(unaudited)

Cash inflows from operating activities

56,924

101,285

1,359,284

1,386,530

1,550,056

Cash inflows/(outflows) from investing activities

56,879

(72,877)

(1,017,361)

(1,212,485)

(1,056,736)

Cash outflows from financing activities

(113,151)

(30,958)

(342,086)

(176,022)

(493,173)

Net cash inflow/(outflow)

652

(2,550)

(163)

(1,977)

147

Cash and cash equivalents at beginning of the financial year/period

4,479

4,642

4,642

6,619

6,472

Cash and cash equivalents at the end of the financial year/period

5,131

2,092

4,479

4,642

6,619

B.2.2 Selected key pro forma financial information

The unaudited summary pro forma statement of net assets (the “Pro Forma Statement of Net Assets“) set out below has been prepared to illustrate the effect of the Acquisition on the net assets of Zegona as at 30 June 2023 as if the Acquisition had taken place on 30 June 2023. The unaudited pro forma financial information has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation and, therefore, does not represent the Enlarged Group’s actual financial position.

The unaudited pro forma financial information does not purport to represent what Zegona’s or the Enlarged Group’s financial position would have been if the Acquisition had actually taken place on the date indicated nor does it purport to represent Zegona’s or the Enlarged Group’s financial position at any future date.

Summary Pro Forma Statement of Net Assets

Unaudited Pro

Zegona as at 30

Vodafone as at 30

Net proceeds of the

Debt financing

Acquisition

Forma of the

€’000

June 2023(1)

June 2023(2)

Offer(3)

Adjustments(4)

Adjustments(5)

Enlarged Group(6)

Total non-current assets

5,128

5,926,813

–

–

1,192,489

7,124,430

Total current assets

4,356

818,096

1,187,822

3,826,000

(5,086,564)

749,710

Total assets

9,484

6,744,909

1,187,822

3,826,000

(3,894,075)

7,874,140

Total current liabilities

327

1,598,867

–

–

13,386

1,612,580

Total non-current liabilities

–

4,453,388

900,000

3,826,000

(3,201,421)

5,977,967

Total net assets

9,157

692,654

287,822

–

(706,040)

283,593

Notes


  1. The net assets of Zegona as at 30 June 2023 have been extracted, without material adjustment, from the Zegona unaudited interim financial statements for the six months ended 30 June 2023 incorporated by reference into this Prospectus.

  2. The net assets of Vodafone Spain as at 30 June 2023 have been extracted, without material adjustment from the Historical Financial Information of Vodafone Spain as at 30 June 2023, as set out in Part B of Part XIII (    Historical Financial Information) of this Prospectus.
  3. The Company has raised £ 262 million (€300 million at the Exchange Rate on 9 November 2023) in gross proceeds through the issue of New Zegona Shares pursuant to the Placing at a price per New Zegona Share of 150 pence, which is subject to commissions and other estimated fees and expenses of £11 million (€13 million at the Exchange Rate on 9 November 2023), resulting in total net proceeds for the Company from the Placing of £251 million (€288 million at the Exchange Rate on 9 November 2023). The net proceeds will be used to partially fund the Acquisition, fees and expenses incurred in connection with the Transaction and for general corporate purposes.

EJLSHM Funding Limited has agreed, pursuant to the Conditional Subscription and Relationship Agreement, to subscribe for €900 million of New Zegona Shares at the Offer

Price in the Conditional Subscription which forms part of the Offer. Assuming the Placing completes, the amount of the gross proceeds of the Conditional Subscription will be

€900 million. Zegona expects to recognise the gross proceeds of the Conditional Subscription as a financial liability in the Enlarged Group financial statements.

The Company also intends to raise gross proceeds of up to €8 million through a separate offering of New Zegona Shares at the Offer Price via the PrimaryBid Offer. The

proceeds of the PrimaryBid Offer have not been reflected in the pro forma financial information.

(4) This adjustment relates to the drawdown of an aggregate of €3.9 billion from two facilities, being €3.4 billion from the Corporate Bridge Facility and €500 million from the

Term Loan A Facility. The increase in Borrowings represents the drawdown of €3.8 billion net of arrangement fees of €74 million. The arrangement fees have been included as

a deduction from Borrowings and will be amortised over the life of the facilities..

(5) The acquisition adjustments reflect the following: the Unaudited Pro Forma Financial Information has been prepared on the basis that the Acquisition of Vodafone Spain by

Zegona will be treated as a business combination in accordance with IFRS 3 Business Combinations. Zegona expects to undertake a fair value exercise following Completion

and no account has been taken of any fair value adjustments to the acquired assets and liabilities of Vodafone Spain in the Unaudited Pro Forma Financial Information or

any fair value adjustment to the amount raised in the Conditional Subscription. For the purposes of the Unaudited Pro Forma Financial Information the excess of the purchase

consideration over the carrying amount of net assets acquired has been attributed to goodwill. The calculation of the total consideration and adjustment to goodwill is set out

below.

€’000

€’000

Purchase price

5,000,000

Vodafone Spain cash balance

5,131

Settlement of borrowings owed to related parties

(3,201,421)

Settlement of receivables from related parties

81,433

Adjustment for net working capitalA

–

Total consideration

1,885,143

Less carrying value of net assets acquired as at 30 June 2023

Vodafone Spain net assets

692,564

Pro forma net assets acquired

Goodwill on acquisition

1,192,489

Footnotes:

A An adjustment for net working capital at the completion date compared to the target net working capital in the Acquisition Agreement will only be quantified when completion accounts have been prepared. For the purposes of the pro forma statement of net assets it has been assumed that the actual net working capital at Completion is the same as the target working capital.

Other transaction costs and expenses related to the Acquisition are estimated to be €14 million (not including arrangement fees relating to the debt financing – see Note 4 above).

(6) In preparing the unaudited pro forma statement of net assets of the Enlarged Group, no account has been taken of the trading activity or other transactions of Zegona or Vodafone Spain since 30 June 2023.

B.2.3 Qualifications in the audit report

Not applicable: the audit reports on the historical financial information contained in this Prospectus do not contain any qualifications.

Section B(3) – What are the key risks that are specific to the issuer?

B.3.1 Key risks


  • The Zegona Group may fail to implement its strategy, including to realise cost savings and stabilise revenues, such strategy may take longer to implement or the benefits may be materially lower than has been targeted or lead to disruption or other negative impacts.

  • For a period of time following Completion, the Enlarged Group will be reliant on the Vodafone Group for the provision of certain services and any disruption to such services could be costly and have a material adverse effect on the Enlarged Group’s business, results of operations, financial conditions and prospects.

  • The Enlarged Group’s financial flexibility may be restricted by its level of indebtedness and/or its ability to generate sufficient cash flows to service its indebtedness or meet its financial covenants resulting in default under the Enlarged Group’s debt arrangements, increases in financing costs or the inability of the Enlarged Group to refinance its debt obligations.

  • Failure to control customer churn may adversely affect Vodafone Spain’s financial performance.

  • Vodafone Spain’s business may be affected by the process of consolidation in the telecommunications industry in Spain.

  • Vodafone Spain may not be able to obtain or renew permits, concessions, licences or other agreements it relies on to operate its business on equally favourable terms or at all.

  • Vodafone Spain and, following Completion, the Enlarged Group will rely on network sharing agreements to provide its services and depend upon other     third-parties to access and maintain certain parts of its infrastructure.
  • Vodafone Spain operates in a highly competitive industry.

  • Vodafone Spain may not generate sufficient cash flow to fund the Enlarged Group’s growth or capital expenditures following Completion.

  • The Acquisition is subject to a number of conditions which may not be satisfied or waived, including Zegona Shareholder approval being granted to the Conditional Subscription, which may result in Completion not occurring or being materially delayed.

  • Vodafone Spain may not perform in line with expectations prior to Completion.

Section C – Key information on the securities

Section C(1) – What are the main features of the securities?

C.1.1 – Description of type and class of securities being offered

The Offer comprises the issue by the Company of 697,654,138 New Zegona Shares, of which 174,413,535 are being issued in the Placing and 523,240,603 are being issued in the Conditional Subscription.

In addition, the Company proposes to issue up to 4,651,027 New Zegona Shares in the PrimaryBid Offer.

When admitted to trading, the New Zegona Shares will be registered with ISIN GB00BVGBY890 and SEDOL BVGBY89 and trade under the symbol “ZEG”. The New Zegona Shares, together with the Existing Zegona Shares, will, on Admission and Re-Admission, comprise the entire issued and to be issued share capital of the Company.

C.1.2 – Currency of securities

The Zegona Shares are denominated in pounds sterling.

C.1.3 – Number of Existing Zegona Shares issued and par value

As at the date of this Prospectus, the Company has 6,172,424 fully paid Existing Zegona Shares of 1 penny. The Company has no partly paid shares in issue. The number of Zegona Shares in issue at Admission and Re-Admission, assuming the maximum number of New Zegona Shares are issued in the PrimaryBid Offer, and the Company does not undertake any buybacks of Zegona Shares prior to Admission and Re-Admission will be 708,477,589.

C.1.4 – Rights attaching to the New Zegona Shares

The rights attaching to the New Zegona Shares will be uniform in all respects amongst themselves and Existing Zegona Shares, and they will form a single class for all purposes, including with respect to voting and for all dividends and other distributions thereafter declared, made or paid on the ordinary share capital of the Company.

Subject to any rights and restrictions attached to any shares, on a show of hands every Shareholder who is present in person shall have one vote and on a poll every Shareholder present in person or by proxy shall have one vote per Zegona Share. Except as provided by the rights and restrictions attached to any class of shares, Shareholders will under general law be entitled to participate in any surplus assets in a winding up in proportion to their shareholdings.

EJLSHM Funding Limited has irrevocably undertaken to Zegona and the holder of the Vodafone Preference Shares not to vote the Zegona Shares it holds without the consent of the holder of the Vodafone Preference Shares (as defined in D.1.1 below) (other than in connection with a takeover where the consideration is cash).

C.1.5 – Seniority of securities

Not applicable. There is no difference in seniority between Zegona Shares.

C.1.6 – Restrictions on free transferability of the Zegona Shares

Not applicable. The Existing Zegona Shares are freely transferable and the New Zegona Shares will be freely transferable on Admission.

C.1.7 – Dividend policy

Zegona intends to pay a stable initial dividend in the first two financial years following Completion. The New Facilities entered into in connection with the Acquisition enable Zegona to pay a limited dividend and Zegona is targeting an initial level of dividend which would provide a yield of 2 per cent. per annum based on the Offer Price in this initial period (this is a targeted level only and cannot be guaranteed as it will depend on, amongst other things, the performance of the business and regulatory and financing requirements). Thereafter, Zegona intends to pay a progressive dividend subject to target net leverage and other financial commitments and regulatory requirements.

Zegona’s ability to pay dividends is limited under English company law, which limits a company to only paying dividends to the extent that it has distributable reserves available for this purpose and subject to the other requirements of the Companies Act. As a holding company, Zegona’s ability to pay dividends in the future is, and will be, affected by a number of factors, most importantly the Zegona Group’s ability to receive sufficient dividends from Vodafone Spain or any subsidiary or investment it may acquire in the future. With respect to Vodafone Spain, payment of such dividends is subject to legal and regulatory requirements and other restrictions under Spanish law, including, but not limited to, applicable tax laws. In addition, the financial condition and operating requirements of Vodafone Spain may limit the Zegona Group’s ability to obtain cash from Vodafone Spain. These laws and restrictions could limit the payment of future dividends and distributions by Vodafone Spain to the Zegona Group, which could restrict Zegona’s ability to pay a dividend to holders of the Existing Zegona Shares or the New Zegona Shares. Zegona can therefore give no assurance that it will be able to pay dividends going forward or as to the amount or timing of such dividends, if any.

Section C(2) – Where will the securities be traded?

C.2.1 – Admission

Applications will be made to the FCA and the London Stock Exchange, respectively, for the New Zegona Shares to be admitted to the standard listing segment of the Official List and to trading on the Main Market.

As the Acquisition is classified as a reverse takeover under the Listing Rules, upon Completion, the admission of all of the Zegona Shares in issue immediately prior to Completion to the standard listing segment of the Official List and to trading on the Main Market will be cancelled and applications will be made to the FCA and the London Stock Exchange, respectively, for the re-admission of the those Zegona Shares, including the New Zegona Shares, to the standard listing segment of the Official List and to trading on the Main Market.

Section C(3) – What are the key risks that are specific to the securities?

C.3.1 – Key risks


  • Investments in listed securities may not be a suitable investment for all recipients and the market price of the Zegona Shares and/or Zegona Shares may be volatile

  • Zegona Shareholders who do not subscribe for New Zegona Shares will experience material dilution on their ownership as a result of the Offer and the PrimaryBid Offer

  • Zegona’s ability to pay dividends on the Zegona Shares will depend on the availability of distributable reserves and dividend payments are not guaranteed

Section D – Key information on the Offer and Admission

Section D(1) – Under which conditions and timetable can I invest in this security? D.1.1 – Terms and conditions of the Offer

The Company has raised net proceeds of £251 million, after deduction of the aggregate commissions and the other fees and expenses payable by the Company which are related to the Offer, by way of a non-pre-emptive placing of 174,413,535 New Zegona Shares at a price of 150 pence per New Zegona Share (the “Offer Price“) (the “Placing“). The Offer Price represents a 380 per cent. premium to the closing mid-market price of a Zegona Share on 22 September 2023, the date when Zegona requested that trading in its shares was suspended by the London Stock Exchange following press speculation in relation to the Acquisition. The Company has also raised gross proceeds of €900 million through the conditional subscription for New Zegona Shares at the Offer Price by EJLSHM Funding Limited (“Newco“) via a conditional subscription and relationship agreement dated 31 October 2023 (the “Conditional Subscription” and, together with the Placing, the “Offer“). Newco has agreed to subscribe for New Zegona Shares at the Offer Price (converted to Euro using a pound sterling/Euro exchange rate of £1/€1.1467 (the “Exchange Rate“) or, if the Placing does not complete, such rate on the date prior to Completion) by using the proceeds of the issue by Newco of preference shares to the Seller (the “Vodafone Preference Shares“). Assuming the Placing completes, the amount of the Vodafone Preference Shares will be €900 million.

The Company also intends to raise gross proceeds of up to €8 million through a separate offering of New Zegona Shares at the Offer Price via the

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Zegona Communications plc published this content on 13 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 November 2023 11:26:17 UTC.