LONDON — Blighty’s two troubled cablers continue to fight off financial problems: Telewest is axing 1,500 jobs to save £50 million ($73 million) per year, while NTL gets backing from bondholders for its $10.6 billion refinancing.
The complex debt-for-equity swap, announced last month, will reduce NTL’s debt to about $6 billion (Daily Variety, April 17).
As part of the process, NTL will file for Chapter 11 bankruptcy protection Monday in the U.S.
“Although there is still work to do to implement the plan, we are optimistic that we will be able to complete the recapitalization in an expeditious manner,” said NTL chief exec Barclay Knapp.
“We expect to emerge late this summer with a strong balance sheet and committed funding which is more than adequate to meet our business plan and any contingencies.”
The debt restructuring includes splitting NTL into two companies, NTL U.K. and Ireland and NTL Euroco, which will hold NTL’s assets on the continent.
Some of NTL’s bondholders have also agreed to set up a $500 million loan to fund the company’s U.K. and Irish operations.
In addition, NTL said it had secured further financing for Swiss subsid Cablecom.
14% of staff cut
Meanwhile, Telewest is axing 14% of its workforce to help cut the company’s annual budget to $730 million and stem pressure from investors concerned about its $7.3 billion debt.
Observers believe the cabler may be forced to restructure its debt, like NTL.
Telewest has also announced its first quarter results for 2002. Sales were up 4% to $488 million, and earnings before interest, taxes, depreciation and amortization increased 34% to $133 million.