A year or so ago telco Vocus Group would have been near the top of the list of companies in trouble (in the minds of investors) as it struggled with too much debt, too little cash flow and management, and board problems.
But all that seems to have been overcome and yesterday an announcement of a debt deal – similar to many others in the current COVID-19 pandemic – passed without too much fuss.
Vocus told the ASX in a statement that it had renegotiated a new $1.39 billion debt/loan deal while reaffirming guidance for the full financial year.
CEO Kevin Russell said the new loan would give Vocus “financial stability” and “flexibility” to help the business through the COVID-19 pandemic and into the future.
“The refinancing was undertaken as part of our long-term funding strategy and commenced prior to the significant disruption in the global lending markets caused by COVID-19,” Mr. Russell said in the statement.
“It is a show of confidence that the syndication was oversubscribed during this period and I would like to thank our lenders who have continued to support the business and welcome our new syndicate partners.”
The new syndicated facility is made up of $A1.26 billion and $NZ135 million ($A139 million) with an average term of 3.5 years.
Mr. Russell also reaffirmed guidance, with group earnings between $359 million and $369 million expected for the full financial year to June 30 – a rare step with some many companies withdrawing guidance because of the confusion caused by the rapid spread of the pandemic and moves by governments to control it by locking down large sections of the economy.
“Being able to confirm all the parameters of our financial guidance – which was first provided almost 12 months ago in July 2019 – demonstrates the financial discipline, strength, and resilience of Vocus’ business even in a period of significant economic disruption,” Mr. Russell said.
Vocus shares rose 2.7% yesterday to end the session at $3.21. That puts them up close to 12% year to date, one of the few companies to have gone against the COVID-19 driven sell down. The ASX 200 is down around 10%.
