Tuesday, 26 June 2018 11:13

Vocus increases debt facility to $1.27b

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The Vocus Group has opened a new line of debt to the tune of A$1.27 billion and NZ$150 million, with the same interest cover and gearing ratios but with a new net leverage ratio to provide what it calls "financial headroom and flexibility".

The maximum NLR will be 3.75x at 30 June and 31 December 2018; 3.50x at 30 June and 31 December 2019; 3.25x at 30 June 2020; and 3.00x at December 2020 and thereafter.

Vocus Group chief financial officer Mark Wratten said: “Our new and upsized syndicated debt facility has been structured to provide Vocus with the flexibility required to execute its strategic initiatives over the coming years.

"We would like to thank our existing and new bank group partners for the strong support they have demonstrated.”

The company was recently awarded a contract to build a sub-sea cable between Sydney, Papua New Guinea and the Solomon Islands.

The new debt facility has a weighted average tenure of 3.4 years and the Syndicated Facility Agreement stipulates that dividends will not be paid until NLR is below 2.25x for two consecutive testing dates.

After the new debt facility was put in place, the old one, consisting of A$1.095 billion and NZ$160 million has been repaid and cancelled.

Vocus expects net debt at 30 June to be in the range of A$1.03 to $1.06 billion.

In February, when the company announced its results for the first half of the 2018 financial year, it said it said it was revising downwards its earnings guidance for FY2018, with underlying earnings before interest, taxes, depreciation, and amortisation expected to be in the range of $365 to $380 million as compared to the previously announced figure of $370 to $390 million on revenue in the range of $1.9 to $2 billion; the last figure is unchanged.

Vocus said at the time that the revision was mainly because its Australian Consumer division was set to face headwinds in H2 FY18 due to "over hedging of its energy portfolio and a change in its go to market strategy, resulting in a reduction in the amount of subscriber acquisition costs that can be deferred".

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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