Vocus Group Announces Regarding Conclusion of NZ Sale Process and Provides Update on Debt Refinancing

Vocus Group Limited announced that the Board has concluded that it is in the best interests of shareholders for Vocus to retain the Vocus New Zealand business. Accordingly, Vocus has ceased all discussions with interested parties in the sale process.

Although Vocus received multiple offers for Vocus NZ, in the Board’s view, none of these offers appropriately reflected the fundamental and strategic value of Vocus NZ nor provided sufficient certainty of funding and execution.

Vocus Chairman, Bob Mansfield stated, “Vocus NZ is an excellent business with strong leadership, an attractive growth profile, a clear competitive position and a track record of delivering solid returns on capital. The Board intends to continue to invest in and grow Vocus NZ to enable that business to realise its strategic potential for shareholders”.

Update on debt refinancing

Vocus is pleased to announce that its lending syndicate has consented to amending its covenants under its existing debt facilities by extending the ‘surge limit’ relating to its Net Leverage Ratio cap of 3.5x. 1 As a result of this amendment, a Net Leverage Ratio cap of 3.5x will remain until 31 December 2018. A Net Leverage Ratio of 3.0x will then apply at the testing date of 30 June 2019 and the following periods.

Also, further to its announcement on 27 March 2018, Vocus has continued to progress on its facility refinance plans and is in the process of finalising its appointment of several banks as joint Mandated Lead Arranger and Bookrunners (“MLABs”) to arrange a full refinance of its debt facilities, including an extension of tenor, an upsizing of the facility and appropriate financial covenants. Vocus expects to complete its facility refinance by the end of the current financial year.

Chairman Bob Mansfield stated, “The Board would like to thank our bank group for their strong support shown to date. We are comfortable that the increased financial capacity and covenants that will be sought through the refinancing will provide sufficient financial flexibility for the Company to complete its strategic and transformation initiatives over the next few years”.

The Board remains comfortable on the positioning of the Company’s balance sheet and has no current intention to pursue an equity offering.

Based on Vocus’s expected cash flows, including the final ASC project payment in H1 FY19, Vocus expects that its Net Leverage Ratio will peak in H1 FY19 and will organically reduce over subsequent periods.


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