The National Markets and Competition Commission (CNMC) has authorized Vodafone Spain to take control of Finetwork, deeming that the operation does not present risks for free competition. In this way, the company owned by Zegona has free rein to take over the Alicante operator as compensation for the debt that the latter accumulates for the rental of its fiber and mobile network, since it already had the approval of the government which gave its approval through the Foreign Investment Board (Jinvex).
The Competition Chamber of the CNMC granted its approval to the operation in Phase 1, without the need for a more in-depth investigation, on the understanding that Finetwork’s market share is very small and therefore, combined with that of Vodafone, does not constitute any threat to free competition.
The decision was adopted on Wednesday 5th at the meeting of the body chaired by Cani Fernández and has not yet been communicated to the parties. Communication which, according to a CNMC spokesperson, could be postponed until the end of November. As soon as this procedure is completed, Vodafone will be able to exercise its right to control 90% of the capital of Wewi Mobile, the company that operates under the Finetwork brand, through the exchange of 50 million euros owed to it by the operator based in Elda (Alicante).
The main shareholders of Finetwork filed an appeal last October before the Provincial Court of Alicante against the order of the Commercial Court which approved the execution of the plan presented by Vodafone Spain to take control of Finetwork through the capitalization of the credits claimed by the operator Eldense for the missed payments of the wholesale contract for the rental of its network, as reported by this newspaper. However, this asset does not paralyze the process, so Vodafone will only have to act on the new ownership to make the absorption effective, sources familiar with the process said.
Vodafone’s plan, covered by the new bankruptcy law, consists of a capital increase by offsetting claims of 50 million euros for unpaid debts through the exchange of Finetwork shares, which will give it 90% of the capital, ousting Pascual Pérez, the entrepreneur and founder, who owns almost 50%, and the Kai Capital fund. Furthermore, Vodafone will opt for a financing line of up to 20 million euros to protect the financial situation of Finetwork, which is currently in “imminent insolvency”. They will subsequently appoint a new board of directors consisting of three members nominated by Vodafone.
Vodafone will thus add around one million fiber and mobile Finetwork lines. A wallet that will not be difficult for you to take on as it offers them the service through its network and until September 2024 also included numbering and SIM management.
For the moment, the Finetwork brand and customer contracts will be maintained, although a migration to the Vodafone and Lowi brands is not ruled out in the future. Vodafone currently has 26.3 million accesses, of which 12.5 million mobile, 2.5 million fibre, 1.3 million television and 10 million machine-to-machine (IoT).
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The beginning of this process was the order issued on September 4 by the Commercial Court number 1 of Alicante, which approved the execution of the plan presented by Vodafone Spain to take control of Finetwork through the capitalization of credits owed by the operator Eldense for unpaid withdrawals from the wholesale contract for the rental of its network.
Last October Finetwork appealed against this order before the Provincial Court of Alicante disagreeing with the amount of debt claimed by Vodafone. The appeal is based on the fact that Vodafone’s plan only aims to impose itself on the shareholders and take control of the company without even having an evaluation of the company by an independent expert, but only on the basis of the evaluations carried out by Vodafone itself and completely outside the channel permitted by law for a non-consensual plan.
For the appellants – the main individual shareholders because in this case there is no corporate appeal – there is no precedent for a takeover of a company with the procedure used by Vodafone. And they denounce that, in addition to the conditions precedent approved for obtaining regulatory authorizations, there is also the indecision of a judicial decision with an unpredictable fate.
