Telewest

Woking, U.K.

Revenue: $1.8 billion

Loss: $1.14 billion

Beleaguered cabler Telewest, following in the unhappy footsteps of rival U.K. cabler NTL, is planning a equity-for-debt swap to shore up its precarious finances.

The company, 25% owned by John Malone’s Liberty Media, hopes to persuade its bond holders to restructure its £5.3 billion ($8.3 billion) in debt.

Liberty owns 10% of Telewest’s bonds, and recently made an offer, subsequently withdrawn, to raise its holding to 20%, which would have given it a decisive voice in the proposed restructuring.

Liberty also withdrew its three directors from Telewest’s board, although most observers considered it to be part of long-term maneuvering to take control of the ailing cabler. Ultimately, Liberty signaled it would like to combine Telewest with NTL to create a single major U.K. cabler.

Telewest previously announced 1,500 job cuts (14% of its workforce), to save £50 million ($78 million) a year. But this was not enough to stave off the need for more radical corporate restructuring.

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On the operating level, sales grew by 17% in 2001, although the rate of increase slowed to 4% in the first quarter of this year. The bottom line was hit by a £1.1 billion ($1.73 billion) writeoff, largely tied to the acquisition of cable programmer Flextech, triggering a loss of $1.9 billion.

With all this financial pain, it’s unsurprising that some shareholders protested furiously against the award of $1 million in bonuses to key managers including CEO Adam Singer.

Singer was recently axed because his expansionist style was regarded by the board as unsuited to the task of financial restructuring.

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