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This Vodafone bond has maturity 2079. Its price has not moved today.
https://www.boerse-frankfurt.de/bond/us92857wbq24-vodafone-group-plc-7-19-79
The long term Vodafone bond with the worst performance I could find matures in 2053 and is also denominated in US$. Its performance today was -0.33%.
I don’t know why the stock performed badly today, but the reason does not seem related to the long term viability or profitability of Vodafone.
Management made it clear that the rationale for selling Spain and Italy is that these countries do not earn the cost of capital. Assuming that Spain and Italy are sold, the ratio debt to ebit will decrease significantly. Besides, there is a general agreement that the ECB will reduce interest rates in the foreseeable future; should Germany enter a recession, a significant reduction of interest rates is likely to occur, because Germany is a key player in the ECB. Time changes perspective, also for the better.
I think fleccy has already answered , but the 36.2 B net debt figure can be found also in this presentation, appendix VI
https://investors.vodafone.com/sites/vodafone-ir/files/2023-11/Vodafone-H1%20FY24-Results-Presentation.pdf
Let’s use Swisscom proposal as a benchmark for evaluating Vodafone: multiply projected EBITDAal by 7.6: 13.3Bx7.6=101B. Minus 36B debt=65B. That would be more than £2 per share but in that order of magnitude.
Well, also Swisscom proposal is for the entity value of the Italian business. However, I agree that it is not comparable with Iliad proposal.
Besides, nothing stops Xavier Niel from replicating Swisscom proposal and increase it from 8 B to 8.5 B. I also agree that the real risk is that the Swiss confederation stops the deal.
In my opinion Swisscom proposal is not bad: the multiple EV to EBITDAaL is 7.6.
Consider that the comparable figure for the entire Vodafone is 4 (Net debt 36.2B+18B market capitalisation=54B EV. Projected EBITDAaL is 13.3 B. 54B/13.3B=4).
Xavier Niel took his company private (2 or 3 years ago) after paying a premium of over 60% to minority shareholders; since then, he has made other investments in tlc companies, mainly financed with debt. Probably he is a great entrepreneur and maybe it does not hurt to be married to the daughter of France’s richest men.
However, it seems that in the tlc business it is easier to raise debt than to issue equity.
At the same time, we are continuously warned about Vodafone “huge” debt. That is puzzling…
Xavier Niel took his company private (2 or 3 years ago) after paying a premium of over 60% to minority shareholders; since then, he has made other investments in tlc companies, mainly financed with debt. Probably he is a great entrepreneur and maybe it does not hurt to be married to the daughter of France’s richest men.
However, it seems that in the tlc business it is easier to raise debt than to issue equity.
At the same time, we are continuously warned about Vodafone “huge” debt. That is puzzling…
Today I had a look at three long term bonds issued by Vodafone, Telefonica and Deutsche Telekom; all of them are fixed interest, US $ denominated, with special call. According to the Frankfurt stock exchange, the yield cannot be calculated; therefore, I compared their price performance over the last three years. Not surprisingly, all prices went down significantly; however, Vodafone performed better than both Deutsche Telekom and Telefonica (see prices below). Clearly, this is not a significant sample; however, it could mean that Vodafone has become more attractive for debt investors, compared to other telecom companies.
Price (3 years ago; last close; % change)
Vodafone Group PLC 7% 19/79 122.1; 103.1 (-16%)
Deutsche Telekom I.F. B.V. 8,75% 00/30 151.8; 117.8 (-22%)
Telefonica Emisiones S.A.U. 7,045% 06/36 142.1; 109.0 (-23%)
MILAN, Feb 15 (Reuters) - Telecom Italia's (TIM) competitors have written to the Italian government to voice concerns about the risk that a planned spin-off of the former phone monopoly's network assets reinforces its dominant position in the fixed broadband market, a document showed.
In addition, Vodafone (VOD) may have received a new offer for its Italian unit, according to the report, which cited people following the matter.
I hoped that Hatem Dowidar joining Vodafone's board meant E& had reached 20%. Apparently, that is not the case. However, it could mean that important issues have to be discussed in the near future and the most likely one is a new offer for Italy.