Original article Total Telecom:Read More
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The fibre network operator insists that its growth plans remain on track, despite reports that the company’s backers are exploring a potential sale
CityFIbre are downplaying reports this week that suggested the company’s investors are in talks to sell the business to one of the company’s biggest rivals, Virgin Media O2 (VMO2).
Yesterday, a report from The Telegraph said that two of CityFibre’s major backers – Mubadala and Goldman Sachs – had been holding initial discussions with VMO2 surrounding a potential sale. Sources also suggested that CityFibre’s debt financiers, including NatWest, Société Générale, and Credit Agricole, were also taking part in separate discussions.
CityFibre has been facing mounting financial pressure over the last year. Initially aiming to cover up to 8 million homes with full fibre by the end of 2025, the company has pursued an aggressive – and expensive – fibre network rollout strategy. The company’s debt pile now sits at roughly £3.9 billion, with the company having previously noted that existing funding is set to run out in the middle of this year.
As a result, the network operator has been seeking to secure additional funding for the best part of nine months, reportedly seeking £500 million from existing investors and a further £1 billion from lenders. This funding, the company says, is crucial for its ongoing network rollout, as well as the company’s growing focus on M&A.
CityFibre notably acquired smaller altnet Lit Fibre last year and Connexin earlier this year, which added combined to add around 300,000 premises to CityFibre’s network. In total, CityFibre has roughly 4.3 million UK premises passed, leaving it far from its target.
The operator insists, however, that the funding it needs is still being arranged, saying that the rumours of potential sale discussions are unfounded.
“Any speculation about a potential sale is unfounded. CityFibre is in a strong position and we expect to announce details of our financing shortly, supporting our role in consolidating the sector and accelerating CityFibre’s next phase of growth,” said the company in a statement.
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