October 15, 2016
Multimedia telecoms provider Virgin Media has found a bright side to the credit crunch: breathing space to pay off its £4.3 billion debts.
Virgin Media’s ten main lenders have agreed that the company’s debt – accrued when NTL laid fibre optic cables across the UK in the 1990s – can be held off until 2012.
Under previous agreements Virgin – one of the most debt-laden telecoms companies in Europe – was to start paying back its loans in 2018.
The company said the changes will allow it to work out a comprehensive repayment plan for the debt without having to sell any of its businesses.
CEO Neil Berkett said if the plans get full approval, the Virgin will be able to generate more cash flow, further increasing its ability to pay off the debt.
He added that the amended repayment date benefits shareholders, customers, lenders and employees.
News of the reprieve sent Virgin shares soaring by as much as 25% to $6.59 on the Nasdaq stock exchange.