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Vodafone Gain Extra $5 Billion for TPG Merger Amid COVID Pain

UPDATE – Shares in TPG were up over 4% on Wednesday morning, after analysts speculated TPG shareholders could gain a 60c – 67c special dividend.

Vodafone has snared over $5 billion in extra debt facilities for the the group formed from its $15 billion merger with TPG, stemming from a syndicate of local and international lenders amidst the coronavirus pandemic.

Disclosed to the ASX late Tuesday, the company claims the debt facilities will comprise a $2.57 billion three-year term loan, a $1.72 billion five-year term loan and $960 million revolving loan facility – available subject to customary conditions.

The news follows commentator concern whether they’d be sufficient funding for the merged entity amidst the economic backdrop of COVID19.

The ASX document does note that the global pandemic may shift operations for the new group, inclusive of notching lower sales and higher debt.

The merger is tipped to go ahead by mid-year, and was initially opposed by the ACCC under competitive grounds. It has since been approved by the Federal Court.

“In light of the challenging macroeconomic conditions and resultant market uncertainty caused by the COVID-19 pandemic, there is insufficient knowledge and insight to predict with certainty the effects that the COVID-19 pandemic will have on the merged group’s business or future financial or other performance,” reads the document.

Market watchers expect the TPG-Vodafone merger to go to court for final approval. The merger was approved by the Foreign Investment Review Board earlier this month, and is pending shareholder approval.

TPG’s Singapore business is also set to be turned into a new ASX entity, Tuas Ltd, with TPG founder, David Tech, as executive chairman.

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