UPDATE 1-Vonage extends expiration of tender offer
(Adds details on refinancing effort, company comment)
NEW YORK, Sept 30 (Reuters) - Internet calling company Vonage Holdings Corp (VG.N) extended for a third time the expiration of a tender offer for its convertible notes, showing it is taking time to close a key refinancing deal.
Vonage had launched the cash tender offer for the convertible notes due 2010, originally set to expire on Aug. 27, in connection with a debt refinancing plan.
Silver Point Finance LLC had committed to a $215 million deal that would have helped Vonage refinance its $253 million in convertible debt.
The deal has not yet closed, however, despite an earlier statement that it would likely be done in the third quarter.
"We continue to be in discussions," Vonage spokesman Charlie Sahner said.
Its refinancing efforts come amid a U.S. credit and banking crisis that has forced banks to close their doors to risky investments.
But Vonage had faced challenges even before the credit crisis, despite its status as a pioneer in Web-based phone services that have proven a hit with consumers looking for a cheaper alternative to traditional phones,
It has bled red ink since its launch due to high costs, and has faced growing competition from Skype, a unit of online auction company eBay Inc (EBAY.O), as well as similar services from cable service providers.
Its recent efforts to rein in marketing spending has also added to the slowdown in subscriber growth.
Vonage shares last closed at $1.05 on the New York Stock Exchange. Trading in the shares have recently been halted. They had fallen steadily since their May 2006 IPO price of $17 amid worries about the company's business model.
The company said on Tuesday the new expiration date for the tender offer is Oct. 15. (Reporting by Ritsuko Ando, editing by Dave Zimmerman)
