I said it before, they wont get $400m for NZ (that implies a 6.66x multiplier). What I have been seeing is more like 4-5x in the telco industry. They should had done a Cap Raise back a month ago or so like said. Eliminated all doubt and concern.
Many here are pure speculating and I don't think many people really know how this plays out between a bank and the borrower. What is happening is the banks are saying "Vocus, you are most likely going to breach your debt covenants in June. Before this happens we will give you time to either 1) sell an asset to pay down debt 2) raise capital or refinance. This allows Vocus the ability to spin the news as if they are being proactive to find a suitor but it's actually the banks forcing them to make it happen. If neither option happens then the banks will appoint an Administrator who will sell an asset for whatever price to pay down debt. Pure and simple, there is no messing about. This is why the share price is being sold down at the moment as the risk of the aforementioned occurring is increasing as time passes.
When Vocus said they are exploring refinancing options, I believe they would be looking at the private debt capital market. Most likely senior unsecured bonds with looser lending restrictions but higher interest rates like 8% coupons (if anyone knows Next DC this is how they raise funds). This can be effective if your EBITDA is growing as it frees up cash flow as you don't amortisation of bonds but the face value at maturity. Note that Vocus doesn't pay amortisation (principal) at the moment so it would free up much cash flow for them but would get the monkey (bank) off their back.
VOC Price at posting:
$2.29 Sentiment: Hold Disclosure: Not Held
