Ann: 2018 AGM presentation, page-8

@Jambon

Going into the merger, TPM has a target debt level of $2,024m.

To work out how much special dividend, TPM is able to declare, we can make a guesstimate.

in millions of dollars:
$2,024 (target debt level)
- $1,266.4 (debt level as of 31 July 2018)
- $352 (spectrum payment due on 31 January 2019)
- $100 (BAU capex for 6 months up to 31 January 2019)
+ $430 (Operating cash flows for 6 months up to 31 January 2019)
- $75 (tax payment)
- $50 (mobile capex)[*]
- $18 (IRU payment)
- $50 (Singapore capitalisation)
= $542.6m

With 927.8 million shares on issue, this equates to a special dividend amount of approximately $0.58 fully franked. Declaring $542m special dividend will only use up approximately $232.5m franking credit out of the $711m franking credit that is available as of 31 July 2018.

Needless to say, the amount of the special dividend can be even higher if TPM experiences any of this before the merger:
- Stronger than expected operating cashflows
- Lower than expected tax payment
- Lower than expected BAU capex
- Lower than expected mobile capex
- Lower than expected in the required cash for the capitalisation of the standalone Singapore operation.

If my guesstimate is close to the mark, this means that David Teoh will be able to recoup all of the money that he put into the April 2017 rights issue plus some more.

[*] I believe TPG has been holding back its Australian mobile capex since the merger announcement. It makes sense for them to do this, as it will allow them to declare more special dividend. The expensive small cells network rollout can be temporarily postponed until after the merger, that way, VHA will share half of the costs. This doesn't mean that TPG completely stops the planning process, they can still proceed with the network planning, it's just the actual procurement of equipment that are temporarily delayed.