And they are doing it all again, but trying the debt by stealth tactic this time, like setting up a JV to raise 5bn debt.
Ask yourself, why not pay for the German fibre install from just 6 months of supposed FCF and have 100% ownership of it?
More smoke and mirrors than a fairground here as management and stockholders try to release as much as they can to themselves before the tap is turned off. Just don’t be the one left holding the bag when the music stops.
>>It's nonsensical gibberish lol. What has the interest on a corporate bond got to do with the share price?
Everything. More money parked in bonds and treasuries, less money for stocks. Simple demand and supply dynamic.
The companies that can still do well are the ones that will show reliable growth. Cap gains plus a dividend will be essential to offset the risks of any stock over a high yielding bond. We are coming out of an era of low return bonds and stock prices are adjusting accordingly.
>>Dividend of £0.744 @ 4% interest rate should give a share price of £1.86p imho
That misunderstands hhow big money views a dividend. VOD is all about the div, and if you can get 4% from the BoE or even 5.5% on a US treasury, then you will want 10% div yield to compensate with the risks of holding stock. so 74p next year, unless they can raise the div.
If VOD themselves are issuing bonds at 7% then why buy the shares. That will probably be the coupon on the 5bn the Germany JV wants to raise.
2014 RNS. 7 years and still waiting for the plan.
I can’t see vantage going helping with future profitability. They’ll have to pay to use the network they used to own.
The 3 merge will leave VOD with a smaller share of UK market. So less profit there.
Management are trying to distract investors with the promise of less debt. The best way would be to pay it down with the supposed FCF, unless of course it isn’t really free to use.
70% crash in London property required for this SP. Hmmm
My point is, it's very easy to absorb the UK is finished rhetoric. We are not the only place having difficulties.
One thing us brits are great at is bashing ourselves. It's good to be humble, but have some comfort that the grass is no greener over there, wherever there is.
We are also great at queing and waiting. Skills required in this market.
IMF forecasting Germany to decline 0.3% and UK to increase 0.3% next year.
I thought we were supposed to be better off if attached to Europe?
It's bl0dy difficult everwhere.
Don't worry, they're planning to foist it onto an unsuspecting Hutchinson. Genius.
42
More details will emerge, but it involves debt somehow rather than cash, and VOD just has a way of attracting the stuff.
Guardian explanation is about the most thorough I can find
'The companies said there would be no cash component involved in the deal – Vodafone has twice the customer base of Three – with the relative ownership structure set to be achieved through a “differential leverage contribution” involving debt. Vodafone has about 18 million mobile subscribers compared with Three’s 9.3 million.'
Gearing up to sell Spain
https://www.reuters.com/business/media-telecom/vodafone-hires-evercore-sell-stake-spains-fixed-network-cinco-dias-2022-10-04/
It's an extract from the RNS. To get 51% of the joint venture without paying out cash, they take on ownership of more of the debt than Hutchinson.
It's complex merger stuff I grant you.
>>The relative ownership would be achieved through a differential leverage contribution at closing, and no cash consideration will be paid.
In other words, VOD get 51% by taking on more of the debt.
The contest is hotting up...Lovin it
A brave call, not because VOD can’t achieve that level in the right market but because there is a terrible feel in the air that the macro is going to drag on, with more stress to come and time needed to sort it.
The FED have called an emergency meeting for Monday. It goes on.
Porsche is probably busy following the price of Porsche stock which went public yesterday.
It’s fascinating. In a blinding slight of hand the Porsche family which owns 52% of VW and therefore 52% of Porsche before the IPO now own something like 68% of Porsche, buying a chunk of shares paid for by paying themselves a special div from VW from the sale of Porsche.
Financial genius must be in the name.
Any Brexit debate becomes charged, but if I may offer some first hand and you do with the info as you wish. In my varied work life I manage a German branch for a client. They are in just as much difficulty as any UK company, if not more so.
I deal with China. It's diffcult there
I deal with USA. It's difficult there
It's hard everywhere, but I enjoy the responsibility of making my own decisions, so I like the UK being independent.
Sterling ramping up today as the world secretly admires our plan. Reduce tax burden and get people back to work, and reduce benefits for those who won't try.
God save the King
Dan I do enjoy stock market history, but the Tulipmania was not a ponzi, it is an example of an asset bubble, and possibly the first.
A ponzi is when you take money from new investors to pay out to existing investors, bit like VOD borrowing to pay a div........
$1bn bond was payable yesterday. In this climate would be good to have an RNS to say what happened with it.