An official debt-postponement deal between Virgin Media and its lenders is imminent, according to a report in yesterday’s Sunday Telegraph.
Virgin Media, which was expected to start paying back its £4.3 billion debt next year, has asked its lenders to defer repayments until 2012 because of the credit crunch.
The company had been due to repay £1.1 billion in 2010 and another £1 billion in 2011.
However, turmoil on the credit markets means that Virgin is unlikely to be able to find the repayment money at the moment.
Its debt was acquired by NTL in the 1990s during the roll-out of fibre optic cables across the UK.
Share prices in Virgin Media, whose biggest shareholder is Richard Branson, jumped almost 30% on 13th October after the company announced that its ten main lenders supported its request for more time before repayments begin.
Whilst the ten lenders account for 50% of the company’s loans, Virgin Media needs support from two thirds of its lenders if the new repayment plan is to be agreed.
An announcement on the new debt repayment schedule is expected this week.