The Chief Financial Officer (CFO) of UK broadband ISP and network business TalkTalk, James Smith, has revealed that the debt-laden group’s existing shareholders have “confirmed their intent to provide new funding of over £200m” to support the company’s “working capital and operational costs“.
The provider has already spent much of the past couple of years wrestling with its existing c.£1bn debt pile, which in 2023 culminated in a plan to demerge the group into three separate businesses (TalkTalk Consumer, TalkTalk Business Direct and the wholesale centric PlatformX Communications – here), while also cutting costs (e.g. marketing) and monetising some assets (e.g. selling IP addresses).
The demerger may also, in theory, make it easier to sell off individual parts of the business (selling the entire group proved tricky) and Virgin Media (VMO2) has previously been linked with a possible acquisition of their consumer broadband business (here), although nothing has come of that yet. The first piece to go was technically TT Business Direct, which ended up being sold to the company’s own shareholders for £95m after struggling to attract other fish (here).
The latest development indicates that the group’s existing backers – Sir Charles Dunstone, Toscafund and Ares Management – will meet next week to confirm an injection of over £200m to help keep the business rolling. According to Sky News, separate discussions with Australian banking giant Macquarie about a larger investment into TalkTalk’s wholesale network business, PlatformX, are still being discussed.
Just for some context. In May 2024 we reported (here) that TalkTalk was attempting to raise £450m from the possible sale of a large stake in PlatformX to Macquarie which, if successful, would help to pay off some of the debt and avoid a default. Suffice to say that TalkTalk are still very much in the midst of trying to resolve their now legendary debt problems, with pressure from several looming repayment deadlines helping to concentrate minds.
James Smith, Group CFO, said:
“We anticipate agreement on new capital investment into the business in the near future, and discussions to achieve that are ongoing. Engagement continues with a potential new investor, together with potential new lenders.
At the same time, the group’s existing shareholders have confirmed their intent to provide new funding of over £200m into the group to support working capital and operational costs.
Those shareholders and the company are in dialogue with existing group lenders, or their advisers, regarding the optimal route to put that funding into the business.”
According to the report, a key meeting will be held on Tuesday next week that should help to hammer out the details, which if agreed may also be accompanied by an amend-and-extend agreement with the group’s lending banks.