Regulator’s decision and deal details
Spain’s National Commission for Markets and Competition (CNMC) has given final approval for the transfer of control over the virtual operator Finetwork to Vodafone España. The largest British investor, Zegona, which owns Vodafone España, will now be able to manage 90% of Finetwork’s shares. This became possible thanks to the exchange of part of Finetwork’s debt obligations to Vodafone for an equity stake.
Previously, a similar approval was granted by the government commission for foreign investments, removing the last formal obstacles to closing the deal. As a result, Vodafone will gain the ability to appoint most members of Finetwork’s board of directors and carry out a restructuring of the company.
Financial aspects and restructuring
The deal is part of the process of settling Finetwork’s debt, which was under review at the Alicante commercial court. In September, the court approved a plan proposed by Vodafone that provides for exchanging 90% of Finetwork’s shares for part of the debt owed to the main creditor. Since the beginning of the year, Finetwork has not paid for telecommunications services provided by Vodafone, resulting in substantial debt accumulation.
After completing all the procedures, Vodafone plans to carry out an additional share issue in Finetwork worth 50 million euros, which will allow the company to partially offset the debt. In addition, Vodafone intends to invest another 20 million euros to stabilize the operator’s financial position and ensure its liquidity.
Changes in management and market implications
As a result of the deal, Finetwork’s shareholding structure will change: 90% will go to Vodafone, while the remaining 10% will stay with the current shareholders, whose stakes will be significantly reduced. The board of directors will be completely renewed, with most seats taken by Vodafone España representatives.
Finetwork, which serves around a million customers, has recently faced a sharp decline in market share and a loss of subscribers. Over the past year, the company lost a significant number of mobile and fixed lines as customers switched to other operators. Despite this, regulators did not see a threat to competition, as the combined market share of Vodafone and Finetwork remains relatively small.
Legal disputes and next steps
At the same time, Finetwork is challenging the approved restructuring plan in the Alicante appellate court, arguing that the amount of debt owed to Vodafone was not properly verified. However, these disagreements did not affect the CNMC’s decision and have not stopped the transfer of control.
Once all the formalities are completed, Vodafone is expected to begin integrating Finetwork into its structure, which could bring further changes to Spain’s telecommunications market.
