priced for takeover, page-10

Sydney6791,

Obviously different people have different interpretation of the response.

it might help if I post my initial email to her.

Does anyone has any thoughts on this?

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Dear Laura,

Many thanks for your response re the conference call.

On a separate matter, I read the weekend (Feb 14-15) AFR article re Valad, excerpts of which are listed at the bottom.

I understand that journalist tend to sensationalise the matter to bring the attention of readers, and that they are not equity analysts, or traders or finance professionals.

However, there might be some element of truth in any rumour and I have a couple of queries here.

1. Is the strategic arm of KordaMentha, 333 Capital called in by (what is believed to be) CBA to explore potential opportunities of recapitalisation for VPG, or is it for other purposes?

2. We have been advised by you guys via telephone, and the CEO via media comment that VPG is not in breach of its financial covenants so far. My conservative estimated calculation also suggested the same (especially when ICR is on a rolling 12 months basis and excludes non-cash writedowns), i.e. both LVR and ICR covenants at group level are likely to be complied with as at 31 Dec 2008 (or for 12 months period ending on the date).

a. However, I am just wondering whether there are clauses of potential default/breach of covenants in the facility agreements with major lenders.

I.e., clauses that require VPG to advise the banks of any potential default/breach of covenants, and/or give the banks the right to review/ withdraw the facilities at some stage.

b. Is there a remedial period for covenant rectification via asset sale, capital raising, etc?
If yes, how long?

3. Are covenants as at 31 Dec 2008 complied with both at Group level and at individual property level? (I understand from your FY2008 presentation that there are various covenants both at group level and at property/project level).

4. Could you pls kindly advise how much debt VPG owes CBA (believed to be the trouble maker now) and the debt maturity profile?

Thank you very much for your help.

Kind regards,