Virgin Media Makes Deal to Delay Debt Repayments for 3 years
The communications and content group Virgin Media has secured an agreement with its bank lenders to postpone its loan repayments, which gives them 3 years to refinance their loans amounting to £4.3 billion. They announced on October 13th that they were going to make some changes to their debt package due to the turmoil of the credit market. They also said that during that time they had total support from its 10 largest bank lenders.
Virgin Media was suppose to refinance its debt during 2009 prior to a set of large repayments, which include £1.1 billion during 2010 and about another £1 billion during 2011. Due to the current credit crunch, the company has chosen to have talks with its lending banks instead of facing the issue next year. The bank lenders of the company had until 12pm on Friday to take a vote on the terms of the agreement. Deutsche Bank, the agent who is running the vote, counted the votes during the weekend and an announcement is expected.
It has been understood that the new deal will see that the banks get fees of as much as £70 million, as well as another £50 million per year in risen margins. Even though this move will leave Virgin Media with a big debt burden to repay in 2012, analysts are saying that the delay will give the company enough time to look for other options, of which includes the selling of some of its assets.
They are hoping that Neil Berkett, the Chief Executive of the company, is going to be able to get the business in a place where their free cashflow will be able to handle the repayments.
Get more information about Virgin Media by going to www.virginmedia.com
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