TalkTalk debt deadlines approach and risk failing if no deal is struck

Salford Quays-based telecoms company TalkTalk is set to go bust unless a £200m funding deal is secured next month.

The broadband and telecommunications provider, which has 3.6 million residential and business customers in the UK, is set to publish a warning in its annual report about “a material uncertainty” over its ability to continue operating as a going concern if no deal is struck.

In addition to ongoing discussions with lenders, a short-term agreement will also be reached with founder Sir Charles Dunstone to invest further funds.

The company is facing payment terms on its existing debt facilities and could exceed them as early as August, which could push TalkTalk into bankruptcy.

It was reported over the weekend that Dunstone was in talks with shareholders, led by private equity firm Toscafund, to keep the business afloat. However, that would only delay the issue, as the company is due to repay a £685m bond in February 2025.

In February 2024, TheBusinessDesk.com reported that it was close to a £450 million investment deal with Australian banking group Macquarie, which was keen to take a minimum 40% stake in the broadband provider’s wholesale arm.

The remainder of TalkTalk has been split up after TalkTalk Business Direct (TTBD), the business and enterprise-focused connectivity provider, was acquired by shareholders including Dunstone in October 2023 for a reported £95m.

The sale was the first phase of a split strategy to create three separate companies.

It is intended that the consumer arm of TalkTalk will be sold at a later date.

TalkTalk has been asked for comment and this story will be updated.