VMO2 - comment
The impact on bondholders here is small, the leverage in the acquired asset is 5.5x (above the level at VMO2), but at <4% of the VMO2 debt stack, it is insignificant. VM02 may make further loans to refinance the Rest of the debt at the JV. The new JV fits in with Liberty's determination to improve the market valuation of its assets; EV/EBITDA of 9.3x, which is well above the <6x multiple the market places on Cable assets.
The EV of the new company will be £1.4bn, or around 1x revenue. VMO2 will contribute a loan of £425m for 70% of the equity => total equity of £607m plus £835m in existing debt (we assume this is a net debt figure). Adjusted EBITDA is £150m, which equates to a 9.3x multiple on 2024 numbers. The company claims it can extract £600m in synergies by 2030, which indicates significant growth is expected.