Ares takes control of UK fibre operator Toob

Ares Management has taken control of UK broadband provider Toob after the company’s existing shareholders agreed to transfer their stakes to the private credit firm, which is also its senior lender, according to a report by Bloomberg.

The report cites unnamed people familiar with the matter as revealing that Ares is injecting an undisclosed amount of new equity into Toob as part of the restructuring. The transaction comes as the alternative fibre sector faces mounting pressure from higher borrowing costs, slowing growth and the need to achieve profitability.

Toob’s largest shareholder was the National Digital Infrastructure Fund, managed by Amber Infrastructure for investors including the UK’s National Wealth Fund and listed infrastructure investor International Public Partnerships (INPP).

INPP said in a regulatory filing that it will transfer its £24.1m ($32.7m) equity stake to Toob’s creditors for a nominal amount after deciding against providing additional capital.

Ares originally provided Toob with around £160m of debt financing in 2023. The latest transaction effectively hands ownership to the lender while providing the struggling fibre operator with additional equity capital.

Toob is among a group of so-called alternative network operators that have spent heavily building fibre infrastructure to compete with BT Group’s Openreach. Many have struggled to generate profits after rapid expansion funded by substantial external investment.

The National Wealth Fund has faced similar challenges elsewhere in the UK broadband market. Earlier this year, it and other lenders took control of rival operator Gigaclear after accepting losses on almost £1bn of debt.