Negotiations over a multi-million pound deal for TalkTalk’s wholesale division have stalled, according to a Daily Telegraph report.
TalkTalk and Macquarie have been in discussions for months over the latter’s investment of up to £500 million in PlatformX Communications in exchange for a majority stake.
TalkTalk currently has a debt pile of £1 billion.
The Macquarie deal would have enabled TalkTalk to refinance two tranches of credit which are due for repayment later this year and in early 2025.
The first is a revolving credit facility worth £330 million that is held by a group of banks and needs to be paid off or renegotiated by November.
The second is £685 million in corporate bonds that are set to mature in February 2025.
TalkTalk founder Sir Charles Dunstone and the company’s other shareholders are separately meeting with lenders today in an attempt to secure a rescue deal to refinance the company.
Last month, they offered a £200 million cash injection and to grant lenders security over assets worth about £200 million in a bid to avoid a debt default and the threat of losing control. But the proposal wasn’t accepted.
James Smith, TalkTalk’s chief financial officer, said, “Funding proposals to refinance the group’s balance sheet are under active discussion. “We are making constructive progress and are confident of a near term agreement which will ensure the group is well capitalised going forward.”
On Thursday, TalkTalk’s credit rating was downgraded by Fitch Ratings, moving it to a “very high level” risk.
The company’s rating was downgraded from CCC to CC, with a debt default deemed probable.
The rest of TalkTalk has been undergoing a break-up after TalkTalk Business Direct was acquired by shareholders in October 2023 for £95 million.
The sale was the first phase of a demerger strategy to create three separate businesses.
TalkTalk’s consumer arm is expected to be sold at a later date.