Reply to post: Re: €27bn debt. Just let that sink in

Vodafone hacks dividend as it reports €7.6bn losses for FY19

Nick Kew

Re: €27bn debt. Just let that sink in

Not a problem while a company is healthy. Only when it runs into trouble, then the debt gets priority, and that can become a millstone around the company's neck.

It's akin to buying a house with a mortgage. If your income drops too far, you have a problem. If you hit negative equity, you may have a problem. But people still do it.

For what it's worth, Vodafone debt still trades above par, meaning the market is not worrying about a risk it might go the way of Debenhams (which couldn't service its debts). Or even companies like Premier Foods that got caught by its debt and zombified in 2008, but remains alive.

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