Shareholders will put in initial £65 million, with further injection of £170 million to follow.
Sir Charles Dunstone, the founder of TalkTalk, has agreed a £400 million refinancing deal with the company’s lenders to avert the threat of a debt default.
TalkTalk has announced today that its shareholders – who include Dunstone, Ares Management and Toscafund – have agreed to inject £65 million of interim funding into the company immediately.
This will be followed by a further capital injection of £170 million, upon execution of binding lock-up arrangements between all the parties, with assets currently held separately such as its Virtual1 subsidiary and Ovo and Shell customer bases also contributed to the group.
In total, the refinancing is worth more than £400 million.
In return, TalkTalk’s bank lenders and bondholders have agreed to extend two debt maturities, which were due to mature in November and February, to September 2027.
The extension will give TalkTalk more time to implement the business plans of its PlatformX wholesale network and its consumer business.
TalkTalk said in a statement, “The company is pleased to announce that the key terms of a refinancing transaction have been agreed between a group of senior secured notes (SSN) holders, a group of revolving credit facilities (RCF) banks (the SSN group and RCF group together represent approximately 60 per cent of the company’s secured debt), Ares Management Funds and the company’s major shareholders.
“The proposed transaction will leave the company well-funded to deliver the respective strategic plans of PlatformX Communications and TalkTalk, continuing to capitalise on their strong positions in the market.”
TalkTalk has also confirmed a series of leadership changes with effect from 1 September, with chief executive Dame Tristia Harrison becoming a non-executive director and being replaced by current CFO James Smith, who will also become CEO of PXC. Tom O’Hagen will take on the new role of executive chairman of PXC. Susie Buckridge will remain at CEO of TalkTalk, while Dunstone will continue as group chairman.