Virgin Media (NASDAQ:VMED)(LSE:VMED) today announced the completion of a major three year refinancing programme that has fundamentally changed the capital structure of its business, providing greater flexibility and scope for the use of any surplus future cash flow. Over the past three years, Virgin Media has worked with its lenders to significantly change its debt mix from predominantly near-term bank debt, to predominantly longer-term bond debt at attractive financing costs. During this period the company has issued $1 billion of convertible notes, £1.7 billion of senior unsecured notes and £1.5 billion of senior secured notes. It also successfully amended its senior credit facilities in October 2008 and again in October 2009 to improve repayment options and flexibility and today closed a new £1.9 billion bank facility. In January 2007, the company had debt repayments of £4.8 billion due within five years, to the end of 2012. Today that figure has been reduced to £325 million before 2013, with no single payment over £200m due in any year until 2015 and the average maturity now up to 6.8 years. This has been achieved in conjunction with reducing the weighted average cost of debt to around 7.5%. Once £178 million of senior notes due 2014 are redeemed next month, Virgin Media will have repaid approximately £815 million during this period using the significant cash flow generated by the business. Together with significant operational and financial improvements, this enhanced debt maturity profile has resulted in a capital structure that will allow Virgin Media greater focus on its operational plans and flexibility around the future use of cash flow, as well as driving top-line growth. Eamonn O’Hare, Virgin Media’s chief financial officer, said; “Our focus has been to steer the business into a position where we have a long-term, fit-for-purpose capital structure that supports our ambitions. The completion of this process is a major achievement, particularly in light of the market conditions over much of the last three years. In order to overcome those issues in the credit markets, we have been innovative and proactive in our efforts to substantially reduce our refinancing risk.
“Looking ahead, we are a highly cash generative business. Through our combined efforts to increase the efficiency of the organisation, we anticipate continuing the good progress we have made. The sustained financial stability of our business underpins all of our commercial efforts and will contribute to our continued leadership position in the superfast broadband and next generation TV markets.”- Ends - NotesPro forma for the planned repayment of Virgin Media’s outstanding 2014 Notes in May 2010, the company’s new debt repayment profile is: 2010: Nothing2011: £150m2012: £175m2013: £200m2014: £200m2015: £950m2016: £1,809m2018: £1,471m2019: £710m About Virgin MediaWith almost 10 million customers, Virgin Media is the UK's first quad-play provider of broadband, TV, phone and mobile. The company is one of the largest residential broadband providers in the UK, using a unique fibre optic cable network to deliver next generation ultrafast internet access of up to 50Mb to just over half of all homes. Combined with a high speed ADSL service and mobile broadband products, Virgin Media is able to offer broadband internet access to virtually the entire country. Virgin Media has the UK’s most advanced TV on demand service and was the first TV platform to carry BBC iPlayer. It is the second largest provider of pay TV, was the first to launch a high definition TV service and offers a high-specification, HD-ready V+ personal video recorder. The company operates the most popular virtual mobile network in the UK which, when launched, was the world’s first such mobile phone service. It is also one of the largest fixed-line home phone providers in the country. Virgin Media also owns Virgin Media Television (VMtv) which runs seven entertainment channels, including Virgin1, LIVING, Bravo and Challenge. VMtv is a 50 per cent joint partner with BBC Worldwide in UKTV, which consists of ten channels including Dave, G.O.L.D., Watch and Alibi.
Virgin Media Inc. is listed on the NASDAQ Stock Market and the London Stock Exchange (VMED).For more information, go to www.virginmedia.com