TechWeb

Vonage May Get Fresh CEO Along With Financing

Jul 25, 2008 (12:07 PM EDT)

Read the Original Article at http://www.informationweek.com/news/showArticle.jhtml?articleID=209601098


VoIP provider Vonage Holdings has tailored a deal with hedge fund Silver Point Finance that will keep the firm operating as the company prepares to name a new chief executive to replace founder and chairman Jeffrey Citron, according to a report in Friday's Wall Street Journal.

Vonage said it has a commitment with Silver Point establishing the terms and conditions for up to $215 million in private debt financing. Silver Point will provide $125 million in the deal, the company said.

"Refinancing our existing debt has been a key priority for the company," said John S. Rego, Vonage's executive VP and CFO, in a statement. "We believe this new financing will provide Vonage with the solid financial foundation to continue to grow our business profitably."

Vonage had been negotiating to do the deal for weeks to refinance $253 million in convertible debt redeemable in mid-December.

Current CEO Citron is preparing to pave the way for another executive -- still unnamed -- to manage the company's day-to-day operation, The Wall Street Journal said in its report. Citron is expected to remain with the company.

The company has had a stormy existence as it pioneered much of the VoIP industry, signing up more than 2.5 million customers along the way. At one point, just as its future looked bright, telecommunications companies including Verizon Communications, AT&T, and Sprint instituted a series of patent suits against Vonage and extracted heavy levies against it.