TalkTalk bonds tumble as debt deadlines loom
TalkTalk’s bond price has fallen to a new low as the embattled telecoms company races to secure a new deal with debt-holders by the end of this month.
One of the broadband provider’s bonds was trading at 66.25p in the pound on Friday, down nearly 9 per cent in a week.
TalkTalk is in the process of negotiating a refinancing of its debts, which amount to more than £1 billion. It said it was making “good progress” in its talks within bondholders.
A key concern for TalkTalk, which was taken private by its founder Sir Charles Dunstone in 2021, is a £330 million revolving credit facility due to expire in November.
The company faces breaching its covenants without fresh investment by the end of this month. It has a further £685 million loan that falls due next February. It is the bonds connected to this loan that declined last week.
Salford-based TalkTalk had intended to raise money by selling a stake in its wholesale business, PlatformX, to the Australian bank Macquarie, but it emerged last week that negotiations had stalled.
The company is instead focused on agreeing a debt deal with lenders. Dunstone has come up with a £400 million package to win support for a plan to extend repayment to 2027. This would be made up of a £200 million capital injection from existing shareholders and a further £200 million of assets pledged to the lenders.
James Smith, TalkTalk’s chief financial officer, said: “Good progress has been made in recent days in discussions with our shareholders and lenders on refinancing the balance sheet and strengthening the group’s funding position.
“We are working towards a near-term agreement with those parties and expect to provide an update shortly.”
