LONDON: Vodafone will sell its struggling Spanish business to Zegona Communications for 5 billion euros ($5.30 billion), it said on Tuesday, in the British firm’s second major transaction this year.

Vodafone’s Chief Executive Margherita Della Valle, who has vowed to reshape the company to make it more profitable, said the sale would enable it to focus its resources in markets with “sustainable structures and sufficient local scale”.

Vodafone said it would receive at least 4.1 billion euros in cash.

It will also provide 900 million euros in financing in the form of preference shares redeemable no later than six years after closing.

Britain’s Zegona, which has previously bought and sold telecoms assets in Spain, said it would fund the deal through 4.2 billion euros in new debt, the Vodafone financing and an equity raise of up to 600 million euros.

Vodafone ranks third in Spanish telecoms after Telefonica and Orange.

The latter is combining with the fourth largest player MasMovil. The British company has struggled to grow in the highly competitive market, and Della Valle launched a strategic review of the unit earlier this year.

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Zegona’s Chairman and CEO Eamonn O’Hare said he was “very excited” about the opportunity to return to the Spanish telecoms market.

“This financially attractive acquisition marks our third deal in Spain after successful turnarounds at Telecable and Euskaltel,” he said.

“With our clearly defined strategy and proven track record, we are confident that we can create significant value for shareholders.”