Last checked at 
(Alliance News) - Zegona Communications PLC on Tuesday said it intends to launch a share buyback programme for up to GBP10 million to increase its underlying asset value per share.
The company, which invests in the telecommunications, media and technology sector said the buyback will start Tuesday, with share repurchases to be undertaken until the earlier of March 31 or when Zegona has fully utilised the allocated GBP10 million.
The buyback programme will be funded from existing capital resources, Zegona said. The company has recently amended its Barclays credit facility, enabling the full undrawn amount of GBP20 million to be used for capital repurchases. In addition, Zegona said it has available cash of GBP23 million.
Zegona's principal asset is its ownership of telecommunications provider Euskaltel, where it is the largest shareholder, owning more than 20%.
Zegona explained that it has been "influential" in driving changes within Euskaltel, leading to Euskaltel expanding nationally into the 85% of the Spanish market where it was not yet present.
Euskaltel's share price has responded positively and has increased by 21% between June and December 2019, when Zegona reported that its stake in Euskaltel and net cash position had a value of GBP1.41 per Zegona share, which was 46% higher than Zegona's share price.
Zegona said it was determined to take actions to close this differential.
Since then, Zegona's share price has increased 14%, the company noted, and "high quality" investors have made "significant" new investments. The stock was trading 4.1% higher in London on Tuesday at 113.50 pence a share.
"The board will continue to review the progress made in closing the differential between Zegona's share price and the underlying asset value per share," Zegona said in a statement Tuesday.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
