Virginmedia gone bust?

Has virginmedia gone bust?

They have 5 billion debt, 400 million revenue and
90% of that revenue is being used to pay interest.
So 9 out every 10 pounds you pay is to prop up
virginmedia interest payments.

So with 40 million they are unable to provide
basic services like 10Mbit internet service because
they don't have money to pay for outoging pipes
because its all being eaten by interest repayments.
Mine is crawling every day at 40kbytes per second.
I have to wait until 3am midnight to get 400kbytes
per second despite paying 37 pounds for 10Mbit link.

No emails - I am reduced to fighting with their crappy
email system for hours on end daily with endless retries.

Virginmedia is financially bust unable to pay for
customer services despite taking money from customers.

The regulators have done nothing to protect
customer services. They should force a knock down sell
of virginmedia assets to protect customers with immediate
effect. Let the French or some Hong Kong operators run
the show - they seem to be a lot better at management
and finances.

7 wrote:

> Has virginmedia gone bust?
>
> They have 5 billion debt, 400 million revenue and
> 90% of that revenue is being used to pay interest.
> So 9 out every 10 pounds you pay is to prop up
> virginmedia interest payments.

Apparently I read recently that this is the classic 'financial model' for a
cable company ! They're hardly alone it seems.

Maybe you should google "debt financing" ?

Graham

Eeyore <(E-Mail Removed)> wrote:

: Apparently I read recently that this is the classic 'financial model' for a
: cable company ! They're hardly alone it seems.

: Maybe you should google "debt financing" ?

Virgin have actually gone *FAR* beyond the classic "cableco debt model"
you allude to - and their debt is getting critical - see
http://www.theregister.co.uk/2007/05...edia_analysis/

In article <(E-Mail Removed)>,
Eeyore <(E-Mail Removed)> writes:
> 7 wrote:
>> Has virginmedia gone bust?
>>
>> They have 5 billion debt, 400 million revenue and
>> 90% of that revenue is being used to pay interest.
>> So 9 out every 10 pounds you pay is to prop up
>> virginmedia interest payments.
>
> Apparently I read recently that this is the classic 'financial model' for a
> cable company ! They're hardly alone it seems.

It's a common problem for any company with extremely high
up-front costs, Channel Tunnel being another example.
They will remain crippled until the company goes bust
and the investors lose their money (in effect they
pay for the up-front costs). Then the company can be
picked up and run viably, freed from its cripping debt.

--
Andrew Gabriel
[email address is not usable -- followup in the newsgroup]

Eeyore <(E-Mail Removed)> wrote:

> 7 wrote:
>
> > Has virginmedia gone bust?
> >
> > They have 5 billion debt, 400 million revenue and
> > 90% of that revenue is being used to pay interest.
> > So 9 out every 10 pounds you pay is to prop up
> > virginmedia interest payments.
>
> Apparently I read recently that this is the classic 'financial model' for a
> cable company ! They're hardly alone it seems.
>
> Maybe you should google "debt financing" ?

Well, actually, when NTL first took over the UK cable network, they had
a debt of 11 billion, so they've done quite well to get it down to just
5 billion.

--
Andy Hewitt
<http://web.mac.com/andrewhewitt1/>

Andy Hewitt wrote:

> Eeyore wrote:
> > 7 wrote:
> >
> > > Has virginmedia gone bust?
> > >
> > > They have 5 billion debt, 400 million revenue and
> > > 90% of that revenue is being used to pay interest.
> > > So 9 out every 10 pounds you pay is to prop up
> > > virginmedia interest payments.
> >
> > Apparently I read recently that this is the classic 'financial model' for a
> > cable company ! They're hardly alone it seems.
> >
> > Maybe you should google "debt financing" ?
>
> Well, actually, when NTL first took over the UK cable network, they had
> a debt of 11 billion, so they've done quite well to get it down to just
> 5 billion.

In that case 'debt financing' would seem to be doing its job.

I'd hardly call it classicly prudent economic practice though.

It has to be said that owing lots of money does actually place you in an
advantageous position since the banks dare not foreclose on you for fear of
losses.

Graham

On 21 May 2007 21:43:13 GMT, in uk.telecom.broadband ,
(E-Mail Removed) (Andrew Gabriel) wrote:

>It's a common problem for any company with extremely high
>up-front costs, Channel Tunnel being another example.
>They will remain crippled until the company goes bust
>and the investors lose their money (in effect they
>pay for the up-front costs). Then the company can be
>picked up and run viably, freed from its cripping debt.

This is where Chapter 11 and its equivalent comes in handy.

For ex-ntl this is a slight problem of course, since they came /out/
of that only a year or so ago.
--
Mark McIntyre

On Mon, 21 May 2007 22:02:44 GMT, in uk.telecom.broadband , Eeyore
<(E-Mail Removed)> wrote:

>I'd hardly call it classicly prudent economic practice though.

Its pretty common practice amongst large businesses to heavily
leverage your income into debt. Small businesses need income, large
ones need turnover but /not/ income. If you actually earn stsuff,
shareholders want a slice, the govt wants a slice, you're expected to
invest in stuff, the banks want paid back, and you can also become a
takeover target.

>It has to be said that owing lots of money does actually place you in an
>advantageous position since the banks dare not foreclose on you for fear of
>losses.

That too...
--
Mark McIntyre

Eeyore <(E-Mail Removed)> wrote:

> > Well, actually, when NTL first took over the UK cable network, they had
> > a debt of 11 billion, so they've done quite well to get it down to just
> > 5 billion.
>
> In that case 'debt financing' would seem to be doing its job.
>
> I'd hardly call it classicly prudent economic practice though.
>
> It has to be said that owing lots of money does actually place you in an
> advantageous position since the banks dare not foreclose on you for fear of
> losses.

I reckon that's the case too. You'll also bring in much more revenue on
the long term, should you eventually pay it off - compared to someone
saving money anyway.

--
Andy Hewitt
<http://web.mac.com/andrewhewitt1/>

Mark McIntyre wrote:

> Eeyore wrote:
>
> >I'd hardly call it classicly prudent economic practice though.
>
> Its pretty common practice amongst large businesses to heavily
> leverage your income into debt.

Because your customers pay the debt anyway.


> Small businesses need income, large ones need turnover but /not/ income. If
> you actually earn stsuff, shareholders want a slice, the govt wants a slice,

Running in debt is a very fine way to avoid taxes.


> you're expected to invest in stuff, the banks want paid back, and you can also
> become a takeover target.
>
> >It has to be said that owing lots of money does actually place you in an
> >advantageous position since the banks dare not foreclose on you for fear of
> >losses.
>
> That too...

Very much so.

Graham