(Bloomberg) -- TalkTalk Telecom Group Ltd. is selling its business-to-business division to a special-purpose vehicle controlled by the broadband provider’s main shareholders as the British telecommunications firm implements a plan for its breakup.  

The deal values the unit at £95 million ($116 million), the company said in a statement on Monday. It also preserves a wholesale agreement with another TalkTalk operation valued at about £25 million over three years. 

The transaction, which keeps the ownership under TalkTalk’s biggest shareholders, is a first step toward attempting to refinance or sell the unit outright. As part of the reorganization plan announced last month, the company is breaking into three — separating its business-to-business, consumer-facing and wholesale units. 

Read More: TalkTalk’s Bonds Rally as Unit Sale Seen Easing Debt Burden

Private equity firm Toscafund Asset Management agreed to buy TalkTalk in 2020 in a deal valued at about £2 billion including debt. The low-cost internet service provider has struggled with a shrinking customer base and a shift from copper to fiber optics as competition for high-speed broadband heats up, hurting their ability to compete in the direct-to-consumer market.

The company is coming up against looming debt maturities, which will need to be refinanced, including a £330 million revolving credit facility with banks due in November 2024 and around £685 million of high-yield bonds maturing in February 2025. TalkTalk’s notes currently trade at distressed levels, more than 1,000 basis points over sovereign yields. 

Rothschild & Co. has been advising the company on its debt refinancing process, said people familiar with the matter, who asked not to be identified because the firm’s role isn’t public. A representative for Rothschild declined to comment.

Banks who lent to the company via the revolving credit facility have been trying to offload some of their exposure, according to people familiar with the trade, who asked not to be identified because the details of the transactions are private. 

Lenders have also been taking advice from PricewaterhouseCoopers LLP, according to the people familiar. A representative for PWC declined to comment.

Earlier this month, TalkTalk refinanced a prior £75 million financing facility that was coming due with a new £75 million credit line from KKR & Co.

--With assistance from Libby Cherry, Eleanor Duncan and Lucca de Paoli.

(Updates background and details of the refinancing throughout.)

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