{"id":110448,"date":"2025-11-01T23:10:09","date_gmt":"2025-11-01T23:10:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/110448\/"},"modified":"2025-11-01T23:10:09","modified_gmt":"2025-11-01T23:10:09","slug":"broadband-operator-saddled-with-1bn-debt-pile-tries-to-find-buyer","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/110448\/","title":{"rendered":"Broadband operator saddled with \u00a31bn debt pile tries to find buyer"},"content":{"rendered":"

Unlock the Editor\u2019s Digest for free<\/p>\n

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/p>\n

Gigaclear, a heavily indebted UK broadband provider, has launched a sale process as investors and creditors including NatWest, Lloyds and the National Wealth Fund try to resolve a \u00a31bn debt pile.\u00a0<\/p>\n

Potential buyers received teaser documents earlier this week, according to three people familiar with the matter. The process comes as Gigaclear<\/a>\u2019s creditors seek a solution to their investment, which soured after an expected equity injection from Equitix failed to fully materialise in 2023.\u00a0<\/p>\n

Other options include writing down debt, a debt-for-equity swap or a further cash injection from investors that include main shareholder Infracapital and Railpen, according to a person familiar with the process. They added that Gigaclear\u2019s operations would not be affected regardless of the outcome.<\/p>\n

Gigaclear, which is available in more than 500,000 homes and has about 160,000 customers, could fetch between \u00a3500mn and \u00a3700mn, New Street Research has estimated.\u00a0<\/p>\n

The dozens of small broadband companies or alternative network providers set up to challenge BT\u2019s Openreach and Virgin Media O2 are now grappling with a collective \u00a38bn debt pile, according to estimates from Enders Analysis, as well as fewer customers than hoped.\u00a0<\/p>\n

Gigaclear\u2019s restructuring process may involve the first major writedown of debt in the \u201caltnet\u201d sector, and would come after lenders including NatWest and Lloyds<\/a> set aside provisions to account for losses in the sector.\u00a0TMT Finance first reported the restructuring.<\/p>\n

Taxpayers stand to take a hit in any writedown as the National Wealth Fund gave a \u00a3240mn guarantee as part of a wider \u00a31.5bn debt package in 2023. The fund has committed more than \u00a31bn to altnets, according to a person familiar with the matter.<\/p>\n

The fund said it continued \u201cto be supportive of the business in exploring ways to raise capital and deliver a sustainable capital structure for the company in order to grow value\u201d.<\/p>\n

Potential buyers for Gigaclear could include the industry\u2019s largest player, CityFibre<\/a>, according to a person familiar with the matter. Any buyer is likely to want a reduction of the altnet\u2019s debt levels before any deal, they added.<\/p>\n

The Financial Times reported earlier this week that Virgin Media O2 was in talks about acquiring the UK\u2019s fourth-largest broadband network, Netomnia, in a potential \u00a32bn deal<\/a>.\u00a0CityFibre has also expressed interest in the business.<\/p>\n

Recommended<\/p>\n

\"Reflections<\/a><\/p>\n

New Street analyst James Ratzer said the \u201ccombination of high build costs and low customer take-up\u201d meant the business was unlikely to have any equity value. <\/p>\n

\u201cTrying to sell a business with no equity value when equity backers and creditors both want a share of any proceeds is very challenging to complete,\u201d he added. <\/p>\n

Gigaclear said it continued to deliver \u201cstrong operational performance\u201d and was \u201cdelivering on all key financial metrics\u201d. <\/p>\n

\u201cOur existing stakeholders remain supportive of the business, and we continue to work constructively with them to explore a range of options that support the long-term success of Gigaclear and deliver the best outcome for all parties,\u201d it added. <\/p>\n

Equitix said it had invested \u00a350mn in Gigaclear in late 2023 that had \u201cunlocked \u00a31bn in senior debt\u201d and was disappointed that the \u201cfinancial performance of the investment did not meet the targets that Gigaclear set itself\u201d.<\/p>\n

Infracapital, Railpen, Lloyds, NatWest and CityFibre declined to comment. <\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":2,"featured_media":110449,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,184,85,46],"class_list":["post-110448","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-il","tag-israel"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/110448","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=110448"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/110448\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/110449"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=110448"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=110448"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=110448"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}