buy or sell, page-16

Well said, Scottport.

The key matter here is cash flow and liquidity position.

They have AUD214.7mln cash as at 31 Dec 2008. now current interest bearing liabilities reduced to AUD147.3mln, plus AUD37.8mln of derivative liabs.

Cash balance, plus operating earnings will allow them the luxury of not accepting Scarborough's offer for D2E swap.

Despite the phenomenal writedowns, the banks, based on their confidence in the underlying cash flow generation capacity of the businesses facilitated the debt restructuring, and did not force the Scarborough deal upon VPG.

As normal credit process, they would have done forecast for at least 3 years, and stress testing and sensitivitiy analysis of interest cover and debt servicing capacity.

Scarborough's agreement to defer the payment (without the D2E deal, if eventuate) will allow additional liquidity for VPG.

The removal of group level covenants avoids a lot of unnecessary uncertainties in the future.

This is actually very positive for us.

The only downside is the increased interest margin, however this is partially offset by the lower benchmark interest rate both here and in UK and other parts of Europe.


It is obviously alive and kicking, not like what the doom and gloom irresponsible brokers have predicted.

It makes me wonder how much they really know about a company they spend so much time researching.