Member Info for mole_man99

Bond holders have more influence than you think.

If you read down the Tender offer it says they are going to issue new notes to replace them. They are not suddenly flush with cash.

These new notes may be at a higher coupon. Behind the scenes they may be under some pressure from bond holders who don’t want to be holding till 2052 at 5%.

Will have to wait and see.

I think VOD would just like the whole thing to go away, so nothing is probably the correct valuation.

Maybe to early to get excited following a relief excitement pop

Reuters
The move by the government will only reduce about 7% of the company's 2.2 trillion rupees outstanding debt as of September 2022, which would result in no immediate free cash flow savings, Goldman Sachs analysts said in a note.

"Given the elevated debt profile, continued market share erosion and meaningful network gap versus peers, we see a low probability of Vodafone Idea raising a meaningful amount of external capital," Goldman analysts said.

It will not be a pound in a year. There won't be a mine in 10 years. Locals will see to that, assuming Demir even do anything.

I shall always proclaim I was glad I got out 20 years ago. Prof still dreaming, and taking the cash, and creating the next batch of burnt CGNR holders and believers.

We meet in the village hall first Tuesday every year.

Have you read the balance sheet?

IT's a good idea to download and read the balance sheet of your chosen investment. The Equity section tells the investor what they own. Currently €122.5bn of losses have been accumulated.
It comes from trading losses over the years and payouts to investors (divs and buybacks), so tells you they have never generated the excess to be paying out to investors, so have in reality had to borrow the money to do it.
You can see the movements in the consolidated statement of changes in equity section, usually just after the balance sheet.

That’s ok. Check out accumulated losses on the balance sheet. That is where divi payments get booked. Loss of 122bn and growing. Doesn’t seem sustainable to me.

It’s over €2bn not million, and it’s not safe as they borrow to pay it. New ceo may can it and you have the danger of losing capital value.

“ Fell to my expected price thereabouts....I really don't know where we go from here but suppose we have a dividend which is safe...for the moment!!”

Just a reminder the div is not safe if it comes with a corresponding decline in capital, the Sp.

Investors should consider the safety of total returns, from any investment. Too much risk of greater declines here with Wunderkid Germany now shrinking.

Dan I don’t think VOD have any MBC left. Just 60bn of normal bonds they owe investors one day.
Maybe they issue stock to meet a payment, but that is not a Mandatory Convertible Bond.

A very tricky year.

I’ll go for the opposite on the assumption exponential means at least 2x. 170p next December, no.
The BOD also won’t hire energetic forward thinker. They are after someone to confirm their own theories, and accelerate a strategy that is not working.
If the new CEO cancels the div and buyback, I’ll take them seriously.

It can go north if market sentiment goes north. On that count it’s all still too fragile. Too many potential black swans hiding in the reeds.

Will be a while before markets are convinced all the dangers have passed, or the dangers actually arrive and down it all goes.

Welcome to 2023.

In this environment the buybacks may have a negative effect on the SP. Spending billions to buy stock when you could be paying off debt is clearly not impressing the big money.

Last valued the bonds program on Sept 16th. Just updated the values based on those bonds listed on Vodafone website

16/9/22 FX adjusted to EUR, total €45.95bn
14/12/22 FX adjusted to EUR, total €49.06bn

An increase of €3.11bn. In that period FX rates have gone in Euro favour, so the real increase is larger.

New bonds issued are at higher coupons. In the US shelf for example, the $1bn bond due in sept with a coupon of 2.5% has been replaced by by 3 bonds totaling $3.75bn with coupons of 4.25, 4.875 and 5.125. Maturities for those extend beyond 2049, so high rates are getting locked in long term.

The movements around the $2.3bn of may 28 bond to be bought back is not incuded yet. It has a coupon of 4.375. The total bond value is $3bn, so they have done a bit of can kicking moving a 2028 commitment to 2050.

They haven’t made 2bn profit. They have transferred 2bn of assets from one place to another.

Don’t see any noise about them now selling the 65% of vodacom to pay debt.

The canvas of the mona lisa is a thing and has a value, as with the frame. The goodwill is how much extra you will pay for the painting. The purchase price minus the canvas and the frame.

That goodwill you can see has a value. A good chance to resell the painting and get it back. VOD's goodwill however, who really knows what it contains. As a shareholder you can ring VOD IR and ask them, but I doubt they will tell you. You can only guess it has some resale value, or is it all vapour linked to past purchases gone bad. Have they written everything off from India yet? will the new CEO kitchen sink with a goodwill write-down?

It is safer to do your calculations excluding goodwill, and intangibles, that you have no idea if they even exist.

Hi Fleccy

LSE site defaults to the true meaning of net book so I took the figure from the fundamentals tab. You can see it at the bottom.

I did not bother to download the vod accounts yet again to check the figure there, but am sure it is correct from the last time I did it.

'The book value of a stock is theoretically the amount of money that would be paid to shareholders if the company was liquidated and paid off all of its liabilities. As a result, the book value equals the difference between a company's total assets and total liabilities. Current Book Value/Shr = 166p—173p.'

A common misunderstanding from investors looking for value.

If a company did close and pay off it's debts, it could only do it with real things, so all the goodwill and intangibles should not be considered. Cautious value investors looking for true value will look at net book. VOD's net book is €0.13 per share. It's a goodwill giant.

It's why buffet isn't here buying for pennies on the dollar, because it isn't. VOD can't wind down and pay back investors, so don't consider it a get out.