Macquarie runs numbers on Vocus Group's data centres
Vocus Group's data centres could be worth $160 million and such a sale would reduce the company's gearing to 2.62-times earnings by the end of the 2018 financial year.
They're the numbers from Macquarie analysts on Thursday morning, who went looking for non-core assets Vocus could sell to ease pressure on its balance sheet.
"The most obvious asset of scale would, in our view, be its data centres business," the analysts told clients.
Street Talk. Bloomberg
"For example, if we were to assume this business generates around $16m in EBITDA, a sale at 10x EBITDA would yield $160m and reduce our FY18 gearing estimate from 2.93x to 2.62x."
Street Talk reported on Thursday morning that Vocus is understood to be in preliminary negotiations to sell its data centre business.
The listed telecommunications company has a portfolio of 20 data centres across Australia, which had $20.7 million revenue in the six months to December 31.
Macquarie said other options for Vocus included exiting the Australia - Singapore Cable (ASC) and avoiding the associated upfront capital costs.
Alternatively, Macquarie said Vocus could seek to reduce its capital expenditure spend within the business into the new financial year.
"Savings may come at the expense of some growth over the medium-term, but still deemed worthwhile," the analysts said.
"Alternatively, as visibility within the Finance department increases, there may be scope to reduce wastage or rationalise capex spend on projects with sub-optimal returns. We expect transformation-related capex will remain a consideration in FY18, but should reduce after that."
Macquarie analysts run numbers on Vocus Group's potential sale of its data centres.
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