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The company is struggling to keep its financial health amid approaching debt repayments
UK telco TalkTalk is racing to secure £200 million in funding from its founder Sir Charles Dunstone and other shareholders to avoid the business collapsing, according to a report from the Telegraph. Dunstone is set to meet with bondholders this week to discuss the potential cash injection.
TalkTalk has a debt pile of £1 billion, with those deadlines for repayments approaching rapidly. Both Dunstone and other shareholders have previously said they would inject £200 million into the company, which, if confirmed, would keep it operational for the short term.
TalkTalk has 3.8 million broadband customers, making it the fourth largest provider in the UK. But despite its scale, the ISP has struggled financially for years, finding little revenue growth in a highly competitive market.
In the company’s latest annual report, which has been seen by the Telegraph, company directors warned that the business could collapse “in August 2024 or sooner”.
“These risks represent a material uncertainty that may cast significant doubt upon the group’s ability to continue as a going concern such that it may be unable to realise its assets and discharge its liabilities in the normal course of business,” the directors continued.
Last September, TalkTalk announced plans to break up the business into three standalone companies, focusing on wholesale, consumer broadband, and small businesses. The company said this would allow for a more efficient sale process and allow it to meet its debt obligations. Since then, rumours of potential sales have been plentiful; most notably, reports at the beginning of the year said that TalkTalk’s wholesale division would be sold to financial services group Macquarie for £450 million, but a deal has yet to be formalised.
“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,” said TalkTalk CFO James Smith.
“At the same time, the group’s existing shareholders have confirmed their intent to provide new funding of over £200 million into the group to support working capital and operational costs,” he continued.
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