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we can't simply view everything statically.
In a situation, Starhub is forced to reduce its debt. Its suppliers will not stand still to risk themselves for its creditors and shareholders. So what would likely happen is that Starhub will further use its available cash flow to pay its suppliers. As the trust between Starhub and its suppliers lowers and the deteriorating financial condition, Starhub's revenue will be hit. Under such circumstance, the shareholders value will badly damaged such that its price probably will fall a lot. Probably, Starhub will increase its equity to please its creditors and suppliers to repair their relationship, which will reduce the dividend permanently.
Starhub is not only interest rate sensitive, but highly revenue-sensitive all because of its high leverage.
The balance among its creditors, suppliers and shareholders highly depends on its revenue stability.
Any deterioration of its revenue will cause catastrophic damage. There isn't much maneuver Starhub can do to deal with operation blowout.
just like the BPL saga. such a loss making business causes Starhub to trade below its 2009 level.
In a situation, Starhub is forced to reduce its debt. Its suppliers will not stand still to risk themselves for its creditors and shareholders. So what would likely happen is that Starhub will further use its available cash flow to pay its suppliers. As the trust between Starhub and its suppliers lowers and the deteriorating financial condition, Starhub's revenue will be hit. Under such circumstance, the shareholders value will badly damaged such that its price probably will fall a lot. Probably, Starhub will increase its equity to please its creditors and suppliers to repair their relationship, which will reduce the dividend permanently.
Starhub is not only interest rate sensitive, but highly revenue-sensitive all because of its high leverage.
The balance among its creditors, suppliers and shareholders highly depends on its revenue stability.
Any deterioration of its revenue will cause catastrophic damage. There isn't much maneuver Starhub can do to deal with operation blowout.
just like the BPL saga. such a loss making business causes Starhub to trade below its 2009 level.