ZEGONA SELLS TELECABLE FOR TOTAL VALUE OF UP TO €701M1,2

Zegona Communications PLC announces the sale of Telecable, its Spanish Cable business, to Euskaltel Attractive valuation for Telecable: ? Euskaltel is acquiring Telecable for a total value of up to €701m1,2, comprising an Enterprise Value of €686m and up to €15m deferred payment

? The Enterprise Value consideration includes €186.5m cash3 and 26.8m shares in Euskaltel (15% ownership)

? Transaction values Telecable at 10.8x EBITDA and 17.7x Cash Flow4 Substantial value creation for Zegona shareholders:

? Transaction values Telecable at an implied Zegona share price of £1.995

? 64% premium to Zegona’s undisturbed share price6 and 41% premium to Zegona’s current share price7

? 42% total shareholder return versus initial investment by Zegona shareholders8 Transaction structure provides opportunity for additional shareholder value:

? The combined business creates the leading integrated telecommunications operator in the North of Spain, with enhanced scale and exceptional cash generation (€711m Revenues, €346m EBITDA, €224m Cash Flow9)

? Substantial synergies, valued by Euskaltel at €245m, equivalent to €1.37 per share in the combined business

? Zegona will have significant influence in Euskaltel through its Board representation10 and a newly created Strategy Committee

? Opportunity to close shareholder value gap – Euskaltel trades at a discount to many of its industry peers11 Significant capital returns for Zegona shareholders:

? The transaction will generate significant up-front cash proceeds and we intend to return excess cash to shareholders quickly and tax efficiently

? Transaction allows Zegona to maintain its dividend policy (5p per share for 2017)

? Zegona’s ownership in Euskaltel is subject to customary lock-up provisions, but Zegona has the ability to return shares back to its shareholders in specie at any time

Eamonn O’Hare, Zegona’s Chairman and CEO commented; “When we acquired Telecable in 2015, we identified the opportunity for substantial value creation through the combination of the 3 independent Northern Spanish Cablecos.

This transaction turns our vision into reality, generates very attractive returns for our shareholders and provides the opportunity for significant additional value gain. We look forward to working closely with the Euskaltel Board and senior management team to help close the company's current valuation gap and assist in defining the next exciting chapter of Euskaltel’s development.

We continue to see many attractive opportunities across the broader European TMT landscape and completing this transaction will allow us to bring increased focus to Zegona's search for the next investment where we can again apply our proven "Buy-Fix-Sell" strategy.”

J.P. Morgan Cazenove acted as lead financial advisor to Zegona; Oakley Capital Limited also advised Zegona on the transaction