TALKTALK AUDITOR QUITS – Broadband provider narrowly avoids going bust

TalkTalk’s auditor has quit as the broadband firm faces a fresh squeeze on its finances.  Deloitte, which has served as TalkTalk’s auditor since August 2002, has resigned from its role, according to company filings.

A spokesman for TalkTalk said the resignation was a result of a planned rotation following a break-up of the group last year. RSM has been appointed as Deloitte’s replacement.  It comes after billionaire founder Sir Charles Dunstone and other shareholders were recently forced to pump another £235m into the struggling broadband firm to stave off collapse.

While the emergency lifeline helped to avoid a debt default, the cash injection will only cover the cost of running day-to-day operations.  Meanwhile, the debt refinancing was secured at interest rates of as much as 12.8pc, meaning the company still faces punishing annual finance costs.

However, some of these payments will be pushed back to a later date after the company secured “pay if you can” clauses with its lenders.  Nevertheless, analysts have raised concerns about the company’s ability to keep servicing its debt pile, which has now risen to around £1.2bn.