Vonage Near on Refinancing, New CEO

Vonage has announced a deal for up to $215 million in financing from hedge fund Silver Point Finance and should name a new CEO next week.

Proceeds from the deal, along with its own cash, are expected to be used to repurchase the remainder of $253 million in convertible notes it has floating around and was due in December. Auditors had questioned Vonage's ability to pay the notes and keep the business in operation. 

The refinance deal is subject to some other terms, including finding other lenders to come up with $60 million of the debt financing.

In addition, current "interim" CEO Jeffrey Citron will step to the side next week with a new CEO to be announced. Details on a succession plan have not been announced, but the new CEO would be responsible for managing Vonage's day-to-day operation while Citron will "remain involved" with the company.

The Wall Street Journal points out Vonage is by no means out of the woods yet. The company faces increasing competition from cable operators and even wireless carriers, as customers disconnect wireline phones to rely on their mobile phones as their primary means of voice service.

For more:
- Wall Street Journal reports on Vonage new financing, CEO [1]

Related articles:
Vonage goes cash positive--churn and debt still problems [2]
Vonage Spins Happy, But New Customer Subs Decline [3]