Court Approves Vodafone's Acquisition of Alicante's Finetwork

The Commercial Court No. 1 of Alicante has endorsed the restructuring plan proposed by Vodafone Spain for Finetwork due to the latter's accumulated debts. With this decision, the telecom owned by the British investment firm Zegona will ultimately take control of the Alicante-based operator.

The restructuring plan proposed by Vodafone Spain includes several structural measures affecting both the composition and capital of Wewi, Finetwork's parent company. Notably, two measures stand out: first, a capital increase through debt-for-equity swap amounting to 50 million euros, aimed at capitalizing part of the debt Finetwork owes to Vodafone (with the issuance of new shares in favor of the latter).

The second measure is the removal of Wewi's current board of directors and the appointment of a new three-member board designated by Vodafone once the capital increase is executed.

Both measures are contingent upon approval from the National Commission on Markets and Competition (CNMC) and the Foreign Investment Board. These authorizations must be obtained by December 31 of this year, a 'sine qua non' condition. "The plan would be nullified if by December 31, 2025, the competition and foreign investment approvals have not been obtained, unless an extension is agreed," states the ruling reviewed by Europa Press.

Additionally, Vodafone's plan includes a maximum additional financing line of 20 million euros.

Should Vodafone Spain eventually take control of Finetwork—which has around one million active services—there are two possibilities: integrating it into its operations or selling it.

In early July, the Spanish fund Asterion Industrial Partners expressed interest in acquiring the Alicante telecom, as Finetwork communicated to its staff in an internal memo. However, Wewi can still appeal the court's decision, although sources consulted by Europa Press indicate that it is "unlikely" that this route will succeed.

"The order published today approves the restructuring plan presented by Vodafone Spain for Finetwork. This ruling supports our position and represents a significant step in the process, which remains pending authorization by the competent regulatory authorities, which we trust will occur within a month. With the approval of the restructuring plan, Finetwork's operational stability is reinforced, ensuring the regular provision of service to its customers," commented Vodafone Spain.

The legal battle between Finetwork and Vodafone began in mid-May when the telecom controlled by Zegona initiated legal actions against the Alicante operator due to the latter's accumulated debts under various contracts between the two companies.

In fact, at the end of May 2024, Vodafone Spain signed a new wholesale access agreement to its network with Finetwork for the next 10 years after the previous one expired and was extended for a couple of months. The negotiations for renewing that contract took longer than expected (around five months) and included a debt write-off linked to the previous contract of around 40 million euros and tied to the establishment of a new payment schedule.

It is also worth noting that the new wholesale contract, with which Finetwork ceased to be a Vodafone reseller and became a virtual mobile operator, resulted in the migration of 1.2 million mobile and fixed lines from Vodafone Spain to Finetwork.

WITHOUT A CEO SINCE THE END OF 2024

On another note, Finetwork has been without a CEO since December 31, when Óscar Vilda's departure was announced. He later joined Dazn as CEO for Spain and Portugal.

Since then, the company has been led by a 'transition committee' comprising the brand's founder and president, Pascual Pérez, and the Business and Technology directors, Manuel Hernández and Carlos Valero.

Another significant change in the company since then is the increased presence of Kai Capital in its shareholding after securitizing a 10 million euro loan signed in the summer of 2024.