TPM debt or equity raising for 700mhz acquisition?

Hey all,

Would like opinion of fellow HC posters, if TPG does acquire 700mhz band - how would they finance it?

It is probably fair to say that TPG and it's CEO David Teoh has their eye strongly focused on mobile world. With their recent expansion in Singapore, list of deliberate acquisitions in Australia, and their announcement to participate in auction for 700mhz band - it is not far fetched to believe that we might have a fourth mobile provider in Australia very soon. So then how would they finance it?

Their current debt facility is for $1,635m (from the annual report) and is currently drawn at $1,350m. TPG most likely will lower that down to $1,150/$1200 when HY results come in in march (guestimating from their cashflow), but they are still in process of spending ~400 million for Singapore expansion.

The 2 x 700 mhz band is estimated to cost between $600m (this is what vodafone wanted to pay) and $1b. Watching how aggressively TPG pursued Singapore market and paid substantially over the reserve for it, I would not be surprised if price did reach or even exceeded $1b mark. I understand that the payment will most likely be in installments (3-5 years?), but i doubt their existing cashflow will be able to cover the purchase of the 700mhz band and mobile expansion in Australia and Singapore - at the same time without exceeding comfortable covenants ratios.

So in your opinion, fellow HC, would they renegotiate their debt facility or would they raise equity at currently depressed price?

Thanks

P.S in my view TPM is a strong but with estimated price of $9.2, question is could it still go lower from here?