Vonage's immediate future: debt re-fi, more patent trolls

Our own Larry Dignan has been looking at Vonage's year-end financial report, and points out Vonage's debt issues.

Noting Vonage's patent infringement settlement payments for more than $200 million for the year, Larry notes that:

To wit: Vonage had $190 million in cash, marketable securities and restricted cash as of Dec. 31. A year ago, Vonage had $508 million on that same basis. Forking over more than $200 million in settlements hurts–especially when you lose 3 percent of your subscriber lines each quarter. Vonage ended 2007 with 2.6 million lines total.

However, Vonage isn’t out of the woods by any stretch. The company disclosed it has $253 million in convertible debt, which can be cashed in at the end of 2008. That math doesn’t quite work since Vonage only has $190 million at its disposal–actually $151 million excluding restricted cash.

Vonage is pursuing a re-fi, but although they are a company and not a homeower, these are not exactly the best times for that. And when you owe more money than you hold in assets, lenders of any stripe are likely to drive a hard bargain.

And, what about the patent trolls? They may be looking at Vonage as a company that will settle to make these disputes go away.