TalkTalk Telecom Group Limited is eyeing a £200 million sale of its business-to-business division as the struggling broadband provider looks for ways to pay down its huge debt pile. The telecoms company, founded by Sir Charles Dunstone and taken private by Toscafund Asset Management LLP in a £1.1 billion deal in 2020, is in early talks to offload Talktalk Business Direct Limited. The division, which sells broadband and phone services directly to 90,000 business customers, is understood to be valued at around £200 million.

A source close to TalkTalk said it was trying to formalise its options after receiving several offers for parts or all of the business in recent years. Any transaction could help the company reduce its £1.1 billion debt burden, which has prompted lenders to impose stricter covenants and its auditor to issue a warning over its accounting. However, one insider said proceeds from the sale would go back into the company's wholesale platform.

The company is also exposed to the squeeze on household budgets amid a cost of living crisis. A source said any deal would include a long-term wholesale agreement providing preferential access to TalkTalk's network. TalkTalk declined to comment.