Broadband ISP TalkTalk Confirms £100m UK Funding Deal UPDATE2
The debt strained TalkTalk Group, which has recently been going through another turbulent time due to payment disputes with suppliers and reports of a possible sale (here, here and here), has secured an additional £100m funding deal from existing shareholder Ares Management. This may be enough to reduce some of the financial pressures.
The group previously secured a crucial refinancing package worth c. £400m in September 2024 (here and here), which saved it from the immediate risk of a default on its debts (extended debt maturities to September 2027). But as well as the aforementioned challenges, it’s since also suffered another round of redundancies (here) and then there’s the continued shrinking of its customer base from 3.6 to 3.2 million (here).
Suffice to say that the group is still not out of the woods and has continued to hunt for a buyer for different parts of their business (here), while also recently migrating another batch of their legacy broadband and phone customers (here) over to the Utility Warehouse (Telecom Plus). The strain is evident and reports suggest that there’s now been a major development.
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According to the City Editor of Sky News, Mark Kleinman (credits to Ionide on our forum for spotting), the provider has just “agreed a £100m funding deal with existing backer Ares Management that will alleviate financial pressure on the company founded by Sir Charles Dunstone. An announcement could come as soon as today“. The full story hasn’t yet been published on Sky News, but it should be live any minute.
We asked TalkTalk about this, but they declined to comment.
UPDATE 1:46pm
The full article states that Ares Management has agreed to provide the new funding in two tranches, with the first £60m said to be imminent. This is said to form part of a broader package worth about £200m, including asset sales and the deferral of interest payments.
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In addition to Ares’s £100m commitment, TalkTalk is said to have raised £50m from two disposals in March and June, comprising the sale of non-core customers to Utility Warehouse (we’ve already mentioned those). There was also an in-principle agreement to defer cash interest payments and to capitalise those, said to be worth c.£60m.
UPDATE 5:24pm
TalkTalk has just confirmed all this.
James Smith, TalkTalk Group CEO, said:
“This new investment will significantly strengthen the group’s funding position and demonstrates strong conviction in our business model and value proposition.
We have already made significant progress in simplifying the way we run the business and deliver our services. The new investment will enable us to accelerate with confidence the next phase of new product delivery, automation and improved customer experience across both our wholesale and consumer businesses.”
The announcement confirms that the new facilities have been arranged in conjunction with a number of other actions, including approximately £50m of non-core asset sales recently announced and amendments to existing debt facilities allowing interest to be capitalised, that will together enhance the group’s funding capacity by over £200m. The announcement also adds this (nothing we haven’t mentioned before):
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“The new funding will be used to strengthen the group’s working capital position and support investment in its two businesses – PXC and TalkTalk. The PXC wholesale business is focussed on delivering a next generation all IP product set via its market leading delivery portal, as well as investing to simplify and reduce costs in its network and IT operations. The TalkTalk consumer business is preparing to return to more proactive new customer acquisition with a new and differentiated product offering focussed on in home WiFi coverage, delivered over a new and significantly enhanced customer service platform.”
The £100m facilities remain subject to certain consents, including lender approval, but assuming that gets the nod then completion is expected in September 2025 (interim funding will be provided to the group prior to this completion).
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
Who would honestly want to be a TalkTalk customer at this moment. This is not going to end well.
Services are operational and they are good/cheap enough for customers to stay apparently.
Yeah, I used to work for TT (I was laid off after the hack 9 years ago) and I’ve kept my VDSL line. OR have just laid fibre on my street and now I have until March to decide what next. I might not stay, just because of their shitty handling of recent router EoLs, basically trying to scam people out of money for a new router.
Functionally there’s nothing wrong with the service. If they crash and burn then I suppose I could be without broadband for a short while, until someone picks up the customers. But my setup is resilient to any outage.
History says when a broadband provider goes down things get rearranged fairly quickly.
Despite TT’s faults – and there are plenty – their network is superb with low latency. And they employ none of this load balancing tosh like Zen or Vodafone do by routing their customers across the country.
Matters appear to be drawing towards a conclusion.
Seems somebody is not afraid to possibly lose 100m. The demise of TalkTalk is turning into a long drawn out process!
it maybe a future ‘tax efficient’ move for when TT goes bust. Set losses off against gains etc, never quite understood it as I’ve never been in business.
I don’t know what percentage of the existing debt Ares Management have, but it could be a £100M gamble to try and not loose their whole investment to date? If so, they must have a good level of confidence in doing so.
Good Money > Bad Money
Hard to keep up with, all the money that is being used to prop up TalkTalk. The question being, will it work?
Talk Talk have been a part of the broadband market for a long time, while I would not give them the time of day, certainly after the hacking, it will be a shame if they go belly up, also feel for the people who worked there.
I worked for a company years ago that was having financial problems, and you don’t know if the next day you are going to walk in and have no job, a bit of a strain. Turned out I did walk in one morning, and they said you may as well all go home, company gone bankrupt.
Talktalk sending customers away to other companies like UW doesn’t fill me with confidence about their future. It’s like a jet releasing fuel before impact.
It isn’t what it seems on the surface. Those “offloaded” customers were actually brought on board through TalkTalk’s acquisitions of Shell Energy Broadband and Origin Broadband. TalkTalk had already been the underlying network provider for Shell, and with Shell’s exit from the telecom market, it absorbed their customer base. Similarly, Origin Broadband, facing financial collapse, was integrated into TalkTalk’s operations to avoid user service disruption.
However, these customers were never fully transitioned into standard TalkTalk offerings. They didn’t receive the same access, product range, or benefits as core TalkTalk users. Thus, offloading them was an easy approach to offset the financial impact of onboarding them initially.
UW brands already operate on TalkTalk’s infrastructure – so from a service standpoint, nothing changes for the end customer. The only differences lie in who provides billing and support.
“The new funding will be used to strengthen the group’s working capital…”
What’s the point in giving more working capital to a business which isn’t actually working?
Ares Management? How do you pronounce that?!
It might be a typo 😉
https://www.aresmgmt.com/
@Miss Tuned: Polite way, A-res. 🙂
I’m so glad I’d sold my TT shares at the peak of their valuation.
Clearly the shareholders have money to burn throwing money away like this.
Any other business would be bankrupt with the financial mess they seem to be in . No one wants to see them go under give. The amount of money they owe but it’s getting crazy now . Is this financial
Amount even coming to close to what they need ?
Talk talk was the worst thing that ever happened to AOL when they took control. When talk talk took over my aol isp dealing the service didnt work for 6 months and the pathtic isp talk talk still billed me for 6 months without so much as an apology. They deserve to fail and will do so eventually
There customsr service and support team are inept to put it mildly.