Virgin Media completes €1bn refinancing as accumulated losses rise

Virgin Media Ireland, the telecoms group and TV broadcaster, completed a €1 billion refinancing in June, newly-filed documents reveal. This comprised a €900 million loan and a revolving credit facilities agreement for a further €100 million.

The move came as part of a wider group restructuring earlier this year that saw the unit's immediate parent VMIE Group Holdings being sold to another subsidiary of its US parent Liberty Global.

Virgin Media Ireland Ltd acquired Cullen Broadcasting and Tullamore Beta as part of the restructuring, and is now owned by NewCo Holdco 5 Limited. Tullamore Beta was the old TV3 group of television stations.

The company, which last week announced a €200 million investment in its broadband network over the next three years, reported a €8 million loss for 2020, as against a €26.5 million loss a year earlier.

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Turnover

Turnover rose to €379.3 million from €377.5 million in 2020. A breakdown of sales indicate that €310.8 million was derived from residential revenues, with €34.9 million from business and €33.5 million from mobile.

The company said it had a combined 484,887 customers at the end of 2020 across television, broadband and mobile, up from 479,017 a year earlier.

Accumulated losses for Virgin rose to €379.3 million, as against €372 million in the prior year. Company documents indicate it also owes €791 million to fellow group companies. In spite of these losses, the directors state that they are confident about its ability to continue as a going concern.

The €900 million loan is due to mature in July 2029 with the proceeds to be used in part for working capital purposes, according to its annual accounts. The revolving credit facility is due to mature in September 2027.

Television

Revenue for Virgin Media Television, which operates a number of television channels, declined last year, falling from €59 million to €50 million with losses jumping from €1.6 million to €16.1 million.

The company said that while overall viewership has remained relatively stable over the last number of years, there has been a reduction in the younger audience demographics watching linear television, which has resulted in advertisers moving advertising spend to other platforms, including digital.

“Despite these challenges, the company has managed to grow its share of viewing and commercial impacts over the last four years,” it said.

Restructuring

As part of the group restructuring, Virgin Media Ireland incorporated a new company, VMIE Financing, in Delaware. It also disposed of its investment in Bitbuzz UK, for which it received a €5.2 million dividend in late 2020.

Rumours have been circulating that Liberty Global, which owns Virgin Media Ireland, had been pondering a sale of the company. However, chief executive Tony Hanway ruled this out last week as he confirmed plans by the company to upgrade its broadband network to full fibre over the next three years.

Mr Hanway said its upgraded network, which will provide speeds of up to 10Gpbs (Gigagbits per second) for customers, will be open to other operators on a wholesale basis for the first time.