Ann: TPG Scheme Booklet Released, page-4

all good.. merger on favorable terms for SH.. tpgVodafone raised enormous 'firepower' capital for merger.. it's all systems go..plus special dividend...watch the SP zoom finally..

Vodafone raises extra $5bn firepower for TPG mergerAn independent expert has given the merger a tick of approval. Picture: AFPDAMON KITNEYVICTORIAN BUSINESS EDITOR@DamonKitney7:35PM MAY 19, 2020NO COMMENTSMobile carrier Vodafone has secured more than $5bn of fresh debt facilities for the new group formed from the $15bn merger with fixed-line specialist TPG, which has been given the tick of approval from the independent expert on the deal.In a 350-page scheme of booklet lodged with the ASX late Tuesday, Vodafone said it had obtained binding conditional commitments from a syndicate of external lenders for new debt facilities for the merged group.“The debt facilities will comprise a $2.57bn three-year term loan, a $1.72bn five-year term loan and a $960m revolving loan facility and will be available to draw subject to satisfaction of customary conditions,” the booklet said.It said the facilities would be provided by a syndicate of Australian and international banks with ANZ as the facility agent.There had been outstanding questions as to the funding of the newly merged group, especially in a global environment where the COVID-19 pandemic has wreaked havoc on business customers.TPG executive chairman David Teoh. Picture: David GeraghtyThe document notes the pandemic continues to evolve and may effect the operations of the merged group, including reduced sales, customers seeking lower cost services, increased bad debt risks and reduced outbound international and inbound visitor roaming revenue.“In light of the challenging macroeconomic conditions and resultant market uncertainty caused by the COVID-19 pandemic, there is insufficient knowledge and insight to predict with certainty the effects that the COVID-19 pandemic will have on the merged group’s business or future financial or other performance,” the documents state.Independent expert Lonergan Edwards concluded that in the absence of a superior proposal, the scheme of arrangement was “in the best interests” of TPG shareholders.It found the terms were fair to TPG shareholders because they will have a collective interest in the merged group (49.9 per cent) that is slightly higher than their assessed relative contribution to underlying value.It also found that annual synergies expected to arise from the merger of around $200m per year would be significantly earnings accretive for TPG shareholders.Earlier this month the merger was given the green light by the Foreign Investment Review Board, clearing the way for a meeting seeking the approval of the deal by TPG shareholders next month.TPG’s directors also recommended that shareholders vote in favour of the deal, in the absence of a superior proposal.Pending a vote in favour, which is expected to be a formality, the scheme will go to court for final approval.The two companies are then set to merge by mid-year, two years after the deal was first announced and then opposed by the ACCC on the grounds that TPG had been in the process of building its own 4G mobile network. The deal was then approved by the Federal Court.In addition to the proposed merger with Vodafone, TPG’s Singapore business is to be spun off into a new ASX-listed entity called Tuas Ltd. The memorandum for the demerger released to the ASX on Tuesday shows TPG founder David Teoh will be the executive chairman of Tuas.The separate listing of the Singapore business drew attention as TPG missed out on 5G spectrum in the Singapore government’s auction last month. But the note says the 4G network can be upgraded to 5G. TPG can also offer 5G as a retailer, piggybacking on one of the successful bidders’ networks.Two independent directors, Helen Nugent AO and Arlene Tansey, will also be appointed to the board of the merged company, which will be chaired by David Teoh and run by Vodafone Hutchison Australia Chief Executive Officer Iñaki Berroeta.DAMON KITNEY