The yellow pages publisher Yell said that it has repaid £150 million pounds of senior debt ahead of its deadline of December 31, 2010. With this repayment, the company’s profit after interest but before tax will rise in the next quarter and leaves Yell with a debt burden of £66 million, to be paid before May ‘11.
Investors greeted the early repayment news while the stock’s price moved in the positive direction. The highly leveraged company had re-negotiated its debts with creditors in 2009.
Tony Bates – who was appointed Finance Director in October, said the repayment showed the company’s ability to generate free cash and pay down its debts progressively.
In November 2009, Yell had entered into a deal with its creditors to extend its repayment period extended till 2014. To reduce the balance sheet leverage, it launched a rights issue immediately thereafter.
The company’s net debt for the first half of 2010 stood at £2.9 billion.