[caption id="attachment_2897" align="alignright" width="150" caption="Photo by filtran"][/caption] Note: All data mentioned in this article can be found in this spreadsheet over here.

I get this alot and to tell you the truth, I did ignore Starhub in the past because of this. The debt is enormous! 2009 Long Term Debt = 605 mil 2009 Assets = 1732 mil 2009 Equity = 125 mil Debt to Equity Ratio = 605/125 = 4.85 times !!!!! This is enough to put off investors since a high debt company is a dangerous company to own. It is likely that they will face alot of refinancing problems in the future and they will refinance at a higher cost thus eating into the investors dividends. I was in this discussion at Channelnewsasia forum on this topic and was asked what is Starhub’s take on their so called debt situation. since i am not the best person to answer this question, i contacted Starhub’s Investor Relations and Ms Jeannie Ong was kind enough to explain to me: The question i post:

Good day to you. What I notice is that compare to othe Singapore telcos, starhub’s short term debt + long term debt is so massive that it dwalfs the equity by 2 times. the concern is that in view of so many companies facing problem with refinancing their existing debts, how does starhub manage the risk there? if I am not wrong starhub’s policy is for debt to be 1.8 times of ebitda. Does that mean that the gauge to measure debt risk for starhub is through this metric?

The answer from Ms Jeannie: Read more...