Saturday, December 31, 2016

VodafoneZiggo established on last day of 2016 with EUR 10 billion gross debt

The Vodafone Group and Liberty Global closed the creation of their 50/50 JV on the last day of 2016, calling it VodafoneZiggo. Here are the details:

  • 7.1m HP, nationwide 4G, 9.6m fixed (4.0m video, 3.1m BB, 2.5m fixed voice) + 5.2m mobile RGUs at 160930
  • rev -12 mo EUR 4b, gross debt EUR 10b at 160930
  • synergies NPV EUR 3.5b (unchanged; capex/opex run-rate savings EUR 210m by 2021 (reduced from 280m), Vodafone Thuis sold (FCF -73m), integration costs 280m (down from 350m due to Vodafone Thuis sale), rev synergies >= 1b)
  • shareholder charges for services provided increased (EUR 182m in 2015, EUR 211m in 2017E (97 for Liberty, 114 for Vodafone))
  • Vodafone to receive EUR 0.6b cash, Liberty Global to receive EUR 2.2b cash, based on recapitalisation & equalisation payment Liberty to Vodafone (EUR 0.8b, original estimate EUR 1b; down due to increased net debt at Ziggo)
  • plans predictable dividend, recapitalisations, minimum cash balance, leverage 4.5-5.0
  • brands Vodafone & Ziggo
  • plans converged propositions
  • partners retained cash from subsidiaries since 160215 (JV announcement): EUR 500m from Ziggo, EUR 300m from Vodafone NL
  • not to be consolidated by parents (equity affiliate or associate)
Gross debt EUR 10 billion compares to KPN's EUR 8 billion.

Vodafone Thuis (sold to T-Mobile NL) for the 12 months to 160930:
  • rev EUR 53m
  • EBITDA EUR -29m
  • capex EUR 44m

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