U.K. cable operator getting low equity

Bondholders will get 98.5% to take on debt

LONDON — Shareholders in U.K. cable operator Telewest will receive just 1.5% of equity following a debt-for-equity swap after being promised 3% last September.

Bondholders led by U.S. financier William Huff, who also sits on the board of rival NTL, will receive 98.5% in return for taking on £3.5 billion ($5.7 billion) in debt.

Huff, Telewest’s largest bondholder, represented a rebel group of creditors that includes U.S. cable mogul John Malone and is thought to have led the drive to get more equity for bondholders.

Terms are more favorable than NTL’s restructure which left shareholders with less than 1% of the company’s newly issued stock after emerging from bankruptcy in January.

Telewest’s proposal must be approved by the High Court before it can relist free of the $5.7 billion debt.

Industry analysts expect Telewest and NTL will begin merger talks within a year of Telewest completing its restructure.

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