By Giulia Morpurgo, Irene García Pérez and Edward Clark Liberty Global Ltd. drew a crowd on Thursday at a Morgan Stanley leveraged-finance conference in London as investors peppered executives about the cratering debt of its telecommunications joint venture.

Bonds of Virgin Media O2, the British firm that Liberty co-owns with Telefónica, have been in free-fall since last week, tumbling deep into distressed territory. The securities are a key component of the European high-yield index, so the losses have broad implications for junk investors.

The meetings with Liberty were a hot ticket, with some unable to squeeze in and others huddled in the back, according to people familiar with the matter, who asked not to be identified as they’re not authorized to speak publicly.

The bonds have been slumping since a provisional decision last week from the UK’s Competition and Markets Authority that flagged possible competition concerns around a potential acquisition by Nexfibre Networks Ltd. — a Virgin Media joint venture — of rival Netomnia Ltd. The deal would have brought in fresh cash for Virgin Media.

The telecom company’s two owners are “committed to the business and reducing leverage,” with no debt due until 2029, Virgin Media said in a statement. “More details on any specific measures will be communicated in due course.”A Telefónica spokesperson declined to comment, as did Liberty.

In the meetings, Liberty’s management reiterated that the focus remains on reducing Virgin Media’s leverage, and emphasized the need to preserve the joint venture’s access to capital markets to fund its business, according to the people familiar.

Investors in the room asked Liberty’s management whether they would commit to not carrying out a liability-management exercise, namely by amending the debt structure in a way that would put them in a worse position, the people said. They referenced another large high-yield borrower, ION Platform, which made a similar reassurance in earnings this week.

However, the executives didn’t want to discuss that scenario, saying they’re not at the stage where they’re making those decisions, the people familiar said.

Liberty didn’t lay out how it plans to regain the market’s trust around Virgin Media, as it still awaits a final decision by the UK’s competition watchdog by the statutory deadline of Dec. 15, the people familiar said. A decision on the deal will help to define the plan the broadband provider has been working on to reduce its roughly £22 billion ($29 billion) pile of net debt and place the business on more stable financial footing, the people said.

That could include cost cuts, as well as redefining its strategy for capital expenditures, Liberty management said, according to the people familiar. Virgin Media O2’s annual operational and capital expenditures come to around £8 billion per year, they said.

The previously expected £200 million dividend for the company’s shareholders could be on the table as part of the deleveraging discussions, especially if the Netomnia deal doesn’t go ahead, some of the people said.

The company’s total net debt to annualized adjusted earnings before interest, tax, depreciation and amortization ratio stood at about 5.9 times at the end of June, according to its latest public report. The Netomnia acquisition would lower it by 0.25 times, according to Bloomberg Intelligence’s Erhan Gurses.

Liberty’s representatives also said they’re aligned with Telefonica regarding a plan for Virgin Media, the people familiar said.

Formed from Virgin Media’s broadband network and O2’s mobile platform in 2021, Virgin Media 02 has faced stiff competition in the UK market, leading tor losses. Guidance from the company has signaled it expects a drop of 3% to 5% in adjusted Ebitda for 2026.

Meanwhile, its debt pile, amassed during the era of low borrowing costs, will soon have to be refinanced at much higher levels.