selldown, page-120

Hi,

My understanding is of net debt / (net debt + equity) covenant is the following:

• equity = Balance sheet equity not market cap hence not a function of SP
• Head room 39.4% = how much more they can borrow (assuming fixed equity)

The balance sheet holds allot of Goodwill if this was to have a major impairment charge then covenant may be breached...

Vocus comprises of  many acquisitions that may of resulted in overpaying for some... Nextgen is being talked about as costly acquisition...

For me there is enough headroom for this not to be of concern.

My opinion is that Vocus is caught up in a negative spiral due to internal and external events and cannot break out until FY17 outlook is met...  i.e the primary  cause severe doubts on achieving FY17 guidance needs to be eliminated by confirmation that guidance will be achieved... otherwise events that have minimal or no impact have an exaggerated effect ...