CityFibre Lenders Face Potential £2bn Hit in Debt Restructuring

Lenders to CityFibre, the UK’s largest independent full-fibre broadband network operator, could face losses of up to £2 billion as the company seeks to restructure its debt and secure funding for further acquisitions. According to reports cited by The Sunday Telegraph, banks including NatWest, Lloyds and Société Générale are expected to be asked to accept reductions on some of CityFibre’s £3.8 billion debt.

The proposed refinancing could involve converting some existing loans into equity alongside writing down the value of outstanding debt. The precise terms have yet to be finalised, and the impact is expected to vary between lenders. The discussions follow a £900 million equity commitment from existing shareholders, including Goldman Sachs and Abu Dhabi’s Mubadala Investment Company.

CityFibre has been working to strengthen its balance sheet amid pressure from high borrowing costs and competition in the UK’s alternative broadband network sector. Its 2025 accounts reported a pre-tax loss of £545 million, up from £360 million in 2024, with substantial financing costs contributing to the losses.

Despite the financial challenges, the company continues to expand its customer base. Its network reaches approximately 4.8 million premises, with more than 1.1 million customers connected through retail partners including Vodafone, TalkTalk and Sky. In its latest trading update, CityFibre reported revenue of £164 million for the nine months to September 2026, up 36% year on year.

The refinancing is also intended to support further consolidation in the broadband market, with CityFibre exploring potential acquisitions of rival alternative network providers. Possible targets include Community Fibre, while uncertainty surrounding Virgin Media O2’s proposed acquisition of Netomnia could create another opportunity. The Competition and Markets Authority has raised concerns about the potential impact of the Netomnia transaction on competition.

CityFibre has confirmed that discussions with lenders are ongoing, saying its capital structure needs to evolve to support its acquisition strategy and establish a stronger long-term financial position. The outcome could have wider implications for consolidation and investment across the UK’s full-fibre broadband sector.