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TalkTalk has been slowing to pay millions of pounds worth of payments to broadband suppliers BT OpenReach and CityFibre in recent months as they struggle with cash flow issues despite their recent refinance.
According to people familiar with the issue, the Salford-based group has missed several deadlines this year.
The delays will occur even after TalkTalk received a cash injection from shareholders last year to support its finances. The majority of funds from investors, including TalkTalk Executive Chair Charles Dunstone Irres, were used to pay the outstanding bill with OpenReach, the largest supplier, while the rest was spent on restructuring costs, according to one of the people.
According to estimates from New Street Research, TalkTalk pays broadband suppliers over £60 million each month. Payment delays vary in size, but those who attributed the issue to cash flow issues corresponded to a “small percentage” of the total figure. They added that the bill has now been paid.
TalkTalk is currently trapped in a contractual dispute with Sky Over Streaming Service Nowtv, causing delays. TalkTalk withheld millions of pounds from Media Giant. According to two people familiar with the issue, in the SPAT that Telegraph first reported.
The Telecoms company has been struggling since its purchase in 2021 with a leveraged buyout of £1.1 billion, adding £527 million in debt, which was a £1.1 billion purchase.
The company has secured an extension of its existing debt to approximately £1.2 billion as part of its refinance, which was completed in December. As part of that agreement, the bondholder will be able to control the group as long as it has at least £20 million in cash available per quarter. New Street Research estimates the company will be able to access £42 million in cash at the end of February.
TalkTalk reported losing 400,000 customers last month, cutting its workforce by about 20%. The company said more jobs will continue this year. He said this was because they began streamlining their businesses to improve competition with alternative network providers, or “Altnets.”
TalkTalk’s senior secured bonds have plummeted in value from pounds over 80p to pound 55p as creditors have suffered a deterioration in performance since its report. Meanwhile, that junior bond fell from 28p in pounds to less than 14p in pounds over the same period.
A common bond from former bondholders who abandoned their debt last year told the Financial Times that The TalkTalk is struggling to play “Altnets Taking Share” in the “Super Compitive” market.
According to Enders Analysis, the company’s share of the UK broadband market has fallen to 11% from 14% in 2022. In comparison, Altonet accounts for 7% of the market, up from 3% in the same period.
A contract to sell a portion of TalkTalk to an Australian investment group was considered last year, but Virgin Media O2 filed a bid with the company in 2022. The process of selling this business is currently underway, but according to two people familiar with the issue, there is likely to be a future sale.
TalkTalk, OpenReach, CityFibre, Macquarie and Sky declined to comment.
