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Vonage Secures Private Financing, Seeks New CEO

6:30 am on July 26, 2008 | Category: Business, Corporate, VoIP

Independent VoIP provider, Vonage Holdings Corp., will name a new Chief Executive Officer as early as this week, now that it has successfully returned from the brink of financial ruin, scoring a private financing deal worth as much as $215 million.

The financial lifeline is being extended by Silver Point Finance LLC, which has committed to providing at least $125 million in private debt financing, on the condition that Vonage can raise at least $60 million from other lenders. This will prevent the company from being buried by some $253 million in convertible debt, which comes due in mid-December.

Current Vonage Chairman and interim CEO, Jeffrey Citron, wants somebody else to manage day-to-day operations, although he will remain involved with the company, according to a report in the Wall Street Journal.

Vonage, an early leader in the VoIP telephony market, must now embark on a long journey to escape from debts incurred by its aggressive advertising strategy as well as a number of costly legal settlements.

The company has managed to amass more than 2.6 million subscribers during its short history, and must now strive to maintain and expand this customer base amid growing competition from online VoIP giant, Skype, and a number of fast-growing cable phone services.

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