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A new report claims that the UK’s largest alternative Full Fibre broadband network, CityFibre, is preparing to ask lenders (NatWest, Lloyds and Société Générale) to accept a huge write-down on their debts as part of efforts to “establish a strong, long-term capital structure for the business“. The move is predicted to cost lenders up to £2bn.
CityFibre has so far built their Fibre-to-the-Premises (FTTP) based broadband network to cover 4.8 million UK premises (4.6m RFS), which is home to 1.1 million customers. The company also reported their annual accounts last week, which showed revenues of £164m (up 36%) and adjusted EBITDA quadrupling to £60m, but they also had total liabilities of £6.06bn (up from £5.12bn) and their loss after tax increased to £397m (up from £378m).
The same results also revealed that the network operator had prepared £900m in a “new equity commitment” to help drive future consolidation in the altnet market, which is currently under significant strain from rising build costs, high interest rates and competition. However, CityFibre itself is not immune to such strains, which means that they also need to get their own underlying finances in order.