Recently, CityFibre has addressed rumors surrounding a potential sale of the company to its rival, Virgin Media O2 (VMO2). Reports emerged suggesting that major backers such as Mubadala and Goldman Sachs were contemplating a sale. It was also indicated that CityFibre’s debt financiers, including NatWest, Société Générale, and Credit Agricole, were involved in talks.
Financial pressures have been building for CityFibre over the past year. The company has set an ambitious goal to connect up to 8 million homes with full fibre by the end of 2025. This ambitious strategy, while potentially transformative, carries significant financial demands. Currently, CityFibre’s debt stands at approximately £3.9 billion. The company has already flagged that their current funding will be depleted soon.
To address financial challenges, CityFibre is attempting to secure additional funding. Sources indicate the company is seeking £500 million from existing investors. It is also looking for an additional £1 billion from lenders to support its ongoing network expansion and a growing emphasis on mergers and acquisitions. This includes the acquisition of smaller networks, such as Lit Fibre and Connexin, adding around 300,000 premises to CityFibre’s infrastructure, yet still leaving a sizeable gap to its 8 million target.
Nevertheless, CityFibre maintains a positive outlook. It strongly dismisses the sales rumors, emphasizing ongoing efforts to finalize necessary funding. The company’s statement remarked that any speculated sale is unfounded and affirmed that they remain in a strong position. They anticipated announcing new financing details shortly, which would bolster their growth trajectory and consolidation within the sector.
