CityFibre Asks Banks to Restructure Debt and Fund New M&A Deals

Cityfibre Infrastructure Holdings Ltd. has asked banks to write down part of a £2 billion ($2.7 billion) loan and to provide new money for acquisitions as the UK fiber company seeks to stay afloat, according to people familiar with the matter.

The owners of CityFibre, the biggest independent fiber competitor to incumbent BT Group Plc’s Openreach, met with its creditors earlier this week, the people said, asking not to be identified as the information isn’t public.

The company has asked banks to take a partial writedown on an approximately £2 billion loan in exchange for an equity stake, according to a presentation viewed by Bloomberg News. It also wants the option to pay interest with additional debt, rather than cash, for the remaining portion of that loan, according to the documents.

Under the proposal, part of that remaining loan would stay at the operating company, while another portion would move to the holding company, according to the presentation.

CityFibre declined to comment.

Coming to an agreement with lenders is a condition for CityFibre’s stakeholders, including Goldman Sachs Group Inc., Antin Infrastructure Partners SA, Mubadala Investment Co. and Interogo Holding to inject a further £900 million into the company to fund expansion and deals, Bloomberg News reported in July.

A representative for Goldman Sachs, Antin Infrastructure Partners, and Mubadala declined to comment. Interogo did not immediately respond to a request for comment.

The owners would plug the new money into CityFibre’s holding company as a shareholder loan, which would rank equally in the line of repayment with the shifted portion of the approximately £2 billion loan, the people said.

Alt-nets sprang up through the 2010s to fill gaps in Openreach’s fiber broadband network, but many are now heavily indebted after aggressively investing in buildouts. The UK broadband market is fiercely competitive, exacerbated by fixed wireless and mobile broadband, and alt-nets must merge to expand their customer base and generate revenue.

CityFibre Chief Executive Officer Simon Holden told investors that fiber peer Netomnia Ltd. is the company’s preferred acquisition target to boost its UK network footprint, the people said. He said he’s weighing a renewed offer before the end of the year, according to the people.

The company lost out on an auction for Netomnia last year to rival Nexfibre, but the latter’s proposed £2 billion deal is at risk after initial findings by the UK’s Competition and Markets Authority.

Netomnia did not immediately respond to a request for comment.

Other potential acquisition targets include fellow alt-nets Community Fibre Ltd. and Hyperoptic Ltd., said the people. None of these deals are mutually exclusive, they said.

Community Fibre declined to comment. Hyperoptic did not immediately respond to a request for comment.

Private equity investors and creditors backing alt-nets are pushing for deals amid rising interest rates. CityFibre is under pressure to strike agreements with lenders and potential acquisition targets, or face creditors taking the keys as soon as next year.

CityFibre’s debt pile has hindered earlier acquisitions, according to the presentation.

The company had around £3.81 billion of bank loans at the end of 2025, according to a filing from its holding company last week. That money is due in June 2029.

The group’s net loss before tax widened to £545 million for the year from a loss of £360 million in the prior period, according to the filing.