I would consider it an act of absolute bastardy and sabotage if they dropped ASC, i just cant see it happening under any circumstances, they have a year lead on the competitor, the current data rates our of Perth are amongst the highest on any major route IIRC. The capacity is needed. Its likely a of traffic is going out through east coast links at higher latency, and when ASC opens up will want to go west instead, especially to growing markets like India.
Apart from the pre-commitments from over-the-top companies, they have mentioned they are seeking quid-pro-quo deals on other routes, which could reduce future IRU costs and open more opportunities.
As for funding it, preferences i see in order of priority;
- Pre-commitments
- Cancel Dividends
- Selling most data centre
- Selling power retails
- Cap raise (small amount)
- Selling NZ could be an option if things went really pear shaped, like exceeding banking covenants, and all above options used.
The new CFO has appointed a new financial head to each division (NZ is one) to get better insight, i expect they wouldnt sell off a whole division like NZ until that has been in place for some time and our CFO is happy he has excellent insight into the inner workings. Especially important f they want to sell it.
I think part of the problem we have had is that the mergers have increased complexity, and that has to be removed to gain better insight and forecasts. We actually went without a CFO for 3 months of the last FY which perhaps helps explains some forecasting mistakes.
It looks like the new CFO is a keeper, apart from the new financial heads, there are the new reporting tools they have rolled out, i expect those steps will help give them greater insight, and thus help with financial planning and projections.
VOC Price at posting:
$2.62 Sentiment: Buy Disclosure: Held
