Vodafone 2003 Annual Report Download - page 45

Vodafone Group Plc Annual Report & Accounts and Form 20-F 2003 43
Impact on net debt
£billion $billion
Stake increases in subsidiary undertakings:
Acquisition of Acciona S.A.’s 6.2% stake and a further 2.2% stake in Vodafone Spain 1.8 2.8
Vodafone Netherlands 0.5 0.8
Vodafone Sweden 0.4 0.6
Vodafone AG (now Vodafone Holding GmbH) 0.3 0.5
Vodafone Portugal 0.2 0.3
Vodafone Greece 0.2 0.3
Others 0.1 0.2
Purchase of remaining 50% interest in Vizzavi 0.1 0.2
Acquisition of further stakes in associated undertakings:
Purchase of SBC Communication Inc’s 15% stake in Cegetel Groupe S.A. 1.4 2.2
Other associated undertakings 0.1 0.2
Purchase of a further 1.1% stake in China Mobile 0.5 0.8
Disposal of holding in Ruhrgas AG, and disposal of Arcor’s Telematik business (0.7) (1.1)
4.9 7.8
As a result of the items discussed above and £826 million of foreign exchange
movements, the Group’s consolidated net debt position at 31 March 2003
increased to £13,839 million, from £12,034 million at 31 March 2002. This
represented approximately 18% of the Group’s market capitalisation at 31 March
2003 compared with 14% at 31 March 2002. Average net debt over the twelve
month period ended 31 March 2003 was £11,783 million and ranged between
£10,079 million and £13,839 million.
A further analysis of net debt, including a full maturity analysis, can be found in
note 31 to the Consolidated Financial Statements, “Analysis of net debt”.
The Group remains committed to maintaining a solid credit profile, as currently
demonstrated by its stable credit ratings of P-1/F1/A-1 short term and A2/A/A
long term from Moody’s, Fitch Ratings and Standard and Poor’s, respectively.
Credit ratings are not a recommendation to purchase, hold or sell securities, in
as much as ratings do not comment on market price or suitability for a particular
investor, and are subject to revision or withdrawal at any time by the assigning
rating organisation. Each rating should be evaluated independently.
The Group’s credit ratings help it to have access to a wide range of debt finance
including commercial paper, bonds and committed bank facilities. The Group
currently has US and euro commercial paper programmes of $15 billion and
£5 billion, respectively, which are used to meet short term liquidity requirements.
The commercial paper facilities are supported by a $11.025 billion committed
bank facility which, during the period up to and including 26 June 2003, may be
drawn down in full or in part for a period up to and including 27 June 2004. This
facility replaced the Group’s previous $13.7 billion committed bank facility and
as at 31 March 2003 no amounts had been drawn under it. Additionally, the
Group has a 115 billion Medium Term Note programme (16.2 billion available to
draw) and an $8 billion US shelf programme ($4.8 billion available to draw), both
of which are used to meet medium to long term funding requirements.
The Group also has a ¥225 billion committed bank facility which was fully drawn
down on 15 October 2002 and which matures on 15 January 2007. A 13.5
billion bank term loan, maturing in January 2006, which the Group put in place
to fund the acquisition of interests in Cegetel Groupe S.A., was cancelled on
9 December 2002. At 31 March 2003, the Group had approximately £11.7
billion (pounds sterling equivalent) of capital market debt in issue, with maturities
from April 2003 to November 2032, £2.5 billion (pounds sterling equivalent) of
term funding and £0.2 billion of short term funding.
The following table provides both a summary of the Group’s bond issues, each of
which have been undertaken since 1 April 2002 for general corporate purposes,
including working capital, and a summary of committed bank facilities currently
available to the Group.
Acquisitions and disposals
Net cash outflow from acquisitions and disposals of £4,880 million in the 2003
financial year arose primarily in respect of the acquisitions of additional stakes in
certain existing subsidiary undertakings, all of which are described in more detail
under “Information on the Company – History and Development of the Company”
and “Information on the Company – Business Overview – Business activities –
Mobile telecommunications” above, and the acquisition of Vivendi’s 50% stake in
the Vizzavi joint venture, offset by amounts received on the disposal of the
Group’s stake in Ruhrgas AG and Arcor’s Telematiks business.
An analysis of the main transactions in the year ended 31 March 2003 is shown
below. Solely for convenience, the amounts presented have been translated into
US dollars and pounds sterling at actual rates for dollar denominated
transactions or, otherwise, at the respective exchange rates on 31 March 2003.