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The company recently received a cash injection of £400 million in a rescue deal
TalkTalk’s auditor Deloitte has quit after over 22 years in the position, according to a recent report from the Telegraph.
Deloitte cited serious concerns over the telecom company’s financial controls. The resignation letter from Deloitte pointed to “weaknesses and deficiencies” in TalkTalk’s internal controls over financial reporting, which had not been addressed despite previous warnings. It is “not at the level we would expect for groups of the scale and complexity of TalkTalk,” according to Deloitte’s resignation letter.
A spokesperson for TalkTalk told the Telegraph that the move was planned, and followed a break up of the TalkTalk group last year, where it split into three separate companies: wholesale, consumer broadband and small business. London based RSM has been appointed as the replacement.
In the report, James Ratzer, analyst at New Street Research, explained that Deloitte’s exit “reduces the chance that any company would want to take over TalkTalk”.
The company has been in hot water with debt struggles for several years, as has been teetering on the edge of collapse in the last few months, with its current debt pile standing at almost £1 billion. In August, TalkTalk announced that it has signed a binding agreement on a refinancing deal. Here, company shareholders – including founder Sir Charles Dunstone, Toscafund, and Ares Management – agreed to inject an additional £170 million into the business, in addition to the £65 million invested in July.
The deal also included the transfer of assets including Virtual subsidiary and the customer bases of Ovo and Shell, bringing the total refinancing to over £400 million.
This will allow TalkTalk to extend the debt repayment deadlines which were originally due in November 2024 and February 2025. The new agreement will push the debt maturities out to September 2027, giving the company more time to square up its finances.
Just incase this does not work out, the Telegraph also reported that Ofcom is putting together a “supplier of last resort” regime in case the company does collapse.
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