(Adds details on refinancing effort, company comment)
NEW YORK, Sept 30 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
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)