The new managing director of Telewest has admitted that the indebted cable group will have to undergo financial restructuring to guarantee its future performance.
Charles Burdick who has taken the helm following the removal of former chief executive, Adam Singer (see
Telewest Chief Executive Removed In ‘Boardroom Coup’), said “We’re moving down the steps to a debt-for-equity swap. The probability is higher than 90%.”
Later this month, Telewest will open negotiations with a committee of of bondholders and seems certain to advocate swapping the £3.6 billion bond debt for new shares. The remaining £1.8 million of bank debt is to remain untouched for now.
Telewest is known to be seeking buyers for its 17% stake in SMG, which is valued at £55 million but is likely to keep hold of its TV programming arm, Flextech. Nonetheless, Burdick has not ruled out a merger with cable rival NTL once restructuring talks are complete.
“My personal view is that a merger between the two companies is likely sometime,” he said, “because we will end up with a lot of the same shareholders, some of whom want a quick equity pop.”
After announcing losses of £239 million for the first half of 2002 (see Loss Narrows As Broadband Grows At Telewest), Telewest is to concentrate on attracting customers to its new broadband service which already has 192,000 subscribers taking high-speed internet services.
