Vonage Skid Continues Amid Debt Uncertainty

Vonage missed a commitment to refinance their $253M in convertible debt in the 2nd quarter, and as a result, the company's stock price is losing ground, hitting a year-to-date low closing price of $1.55 per share on Monday.

The convertible debt must be paid back in December, so the company has only five months of runway left to resolve the issue.  Most of the $253M must be refinanced because the company does not have enough cash on hand to pay it off, and because the company does not generate much free cash flow from operations. 

Vonage signed a non-binding letter of intent with a financier in April to refinance the debt, saying that two-thirds of the financing should come from a senior secured credit facility, and one-third from new convertible debt.  In May, CEO Jeffrey Citron said that he expected the transaction to close in the 2nd quarter.  The company missed a June 13th deadline to finish the deal, and then missed the extended deadline set for June 23rd.

Now the company hasn't set any public deadlines. 

Without a refinancing, the options are slim:

• Sell the company to a public or private buyer, or
• Declare bankruptcy

I don't think there is public company that wants to buy the company and assume the debt, so if the debt can't be refinanced in this tough market, maybe the company would declare bankrupty to erase the debt, and then be sold. 

Of course, if Vonage can complete the debt refinancing, then they get to live another day.  However, every day that goes by without debt refinancing increases the chance of bankruptcy.  And the stock price shows it:

   

Comments

[SURESHREDDY]

HI THIS IS SURESH THIS TOPIC IS RELATED TO TELEPHONIC COMPANY.VANAGE ITS NOW IN SOME FINANCIAL PROBLEMS.DEFINITELY ITS GAIN MORE MONEY.

[tinktommy]

This company missed the public deadlines and have to refinance. I think the company which provides good service to the customers will never get in to loss.
====================================================================
jhonny

[tinktommy]

itis very nice topic. The telephony company in North America is facing the financial problems. There have not been developing for last two years. Company’s stock price is losing ground. Hope so it does better in future.
====================================================================vinnu

[tonygreg]

hai,
i think nice article.very intersting to me. can be more details on this.
=================================
tonygreg
http://worldinfo.com

[sandy009]

great work guys.

===============================

sandy009

[url="http://www.worldinfo.com"]worldinfo[/url]

[sandy009]

i think it is indeed a very interesting article to discuss.

===================================

sandy009

worldinfo

[rosa11]

Vonage is one of the largest telephonic company in north America.and gain and loss is the parts and parcel of life so company shold come out of it , do their best.

==============

rosa11

[url=http://www.aboutwi-fi.blogspot.com]About wi-fi[/url]

[Madan21]

It is very nice topic. The telephony company in North America is facing the financial problems. There have not been developing for last two years. Company’s stock price is losing ground. Hope so it does better in future.

==========================
Madan
AboutWi-fi

[kittu]

http://ikeelliott.typepad.com/telecosm/2008/07/vonage-skid-con.html?cid=122909814#comment-122909814

[nicky]

Vonage is a fastest develop telephony company in North America is facing the financial problems. I think Gain and loss is the no new things for business. Now this time, the company can not solve this problem but after a time, it was growing fast and gets profit.
================================================================
nicky

[url="http://www.aboutwi-fi.blogspot.com"]About Wi-fi[/url]

[kittu ROCK U]

yaa, really
It’s very interesting article.
u mustbe see the difference between 2006 sepctemeber to 2008 july------>>> u seen the week result now...
AND Generally speaking, investing in emerging markets is riskier than investing in established markets. Food-price inflation has been, for some time, a strong feature in the emerging economies. Investors have treated emerging markets as a high-beta play on global growth for good reason. It’s natural that sometimes we get profit and sometimes we loss

plzz send me moreeeeeeeeeeee

[Hari]

Vonage is a big company of telephone sector. Vonage missed the public deadlines because the company does not have lot of money .Maybe the company would declare bankruptcy. Now this time, the company can not solve this problem but after a time, it was growing fast and gets profit.

[Hari]

Vonage is a big company of telephone sector. Vonage missed the public deadlines because the company does not have lot of money .Maybe the company would declare bankruptcy. Now this time, the company can not solve this problem but after a time, it was growing fast and gets profit.

[rajesh potluri]

i think first see that any private or public company is ready to buy the company if else try for second option
===================================
rajesh potluri
http://www.worldinfo.com

[Cherri]

Hi........
Vonage has given services to the people.High income company can help to Vonage by taking that company authorities. Loss and Gain are the common things in any company. I wish Vonage can complete the debt refinancing, then they get to live another day.
===========================
Cherri
{url="http://www.worldinfo.com"}http://www.worldinfo.com{/url}

[rinku]

It’s very interesting article. Generally speaking, investing in emerging markets is riskier than investing in established markets. Food-price inflation has been, for some time, a strong feature in the emerging economies. Investors have treated emerging markets as a high-beta play on global growth for good reason. It’s natural that sometimes we get profit and sometimes we loss.

[sachin kumar]

Every company want to growth in industrial area. Vonage has the broadband phone industry. So please gives more detail in your blog.
========================================
sachin kumar
Massachusetts Treatment Centers

[nikita]

It is very nice topic. The telephony company in North America is facing the financial problems. There have not been developing for last two years.

[kamal kumar]

It is a nice topic. According to this topic, in every company gains and loses will be their. Vantage is a fastest growing telephone company in North America. This company missed the public deadlines and has to refinance.

[ritu]

Vonage is a fastest growing telephony company in North America is facing the financial problems.I think Gain and loss are the nature of business.

[priya sharma]

This topic is all about Debt uncertainity.According to my opinion ,if this company don't think there is public company that wants to buy the company and assume the debt, so if the debt can't be refinanced in this tough market, maybe the company would declare bankrupty to erase the debt, and then be sold.

[kitty mittal]

This is very nice topic. Gain and loss are the nature of business. In case of Vonage I must say that they should seek help from private sector or declare the bankruptcy.

[kitty mittal]

This is very nice topic. Gain and loss are the nature of business. In case of Vonage I must say that they should seek help from private sector or declare the bankruptcy.

[nikita]

It is very nice topic. The telephony company in North America is facing the financial problems. There have not been developing for last two years.

[rishu sharma]

Over 25 million calls per week are made using Vonage,the easy-to-use,feature-rich, flat rate phone service.