Yell In Talks With Banks To Ease It’s Debt Burden

November 9, 2011 at 11:39 am | Posted in Online, Print | Leave a comment

Interesting article posted on thisislondon.co.uk regarding the debt situation with Yell with comments from Yell’s Chief Financial Officer and CEO:

Yell today raised fears that it could breach the terms of its £2.6 billion of loans as the Yellow Pages publisher admitted it is holding talks with banks in a bid to ease its debt burden before Christmas.

Chief financial officer Tony Bates said that Yell “is currently in full compliance with its covenants and expects to remain so for the remainder of this financial year”.

But he warned the covenants will get tighter in the run-up to 2014 when the debts mature. “It’s possible we’ll breach but it’s far from certain,” he added.

Yell’s bank covenants are based on the ratio between net debt and underlying profits which dropped by more than 10% to £231.4 million in the six months to September 30.

Half-year results showed growth in digital revenues failed to offset falling print sales as sales fell 12% to £787 million.

The group wants to renegotiate its convenants to create “more headroom” so that it can invest in new digital services such as building websites and managing e-commerce and internet search for small business customers.

Chief executive Mike Pocock said that it is only a matter of time before Yell axes its traditional phone-directory services even online, where sales have also been falling in the face of increased competition.

Source: http://www.thisislondon.co.uk/standard-business/article-24007523-yell-in-bank-talks-amid-fears-over-debt.do