Telewest Reduces Losses Ahead Of Restructure

Whilst turnover rose by 4% to £1.0 billion and operating loss dropped by 25% to £187 million, the company’s debt has risen by 9% year on year and now stands at a hefty £5.3 billion. Telewest is currently negotiating with creditors for a full financial restructure which should alleviate around £3.5 billion of this debt (see Telewest Defers Payments Ahead Of Restructure).

Today’s statement says that discussions with senior lenders are continuing and that the Board is close to reaching an agreement with a steering committee of senior lenders and the Bondholder Committee over the restated bank facilities. Negotiations are continuing with other major stakeholders to secure agreement on the restructuring and Telewest expects to make a further announcement on this progress by the end of this month.

Broadband leadership Today’s results also show that the company has 235,000 broadband subscribers, which it claims account for over 80% of broadband connections in its franchise areas. Net broadband internet additions in Q3 were 39,000, representing 22% growth to 216,000 as at 30 September 2002; 21,000 of these subscribers take the 1Mb Blueyonder service, with the remainder subscribing to the 512Kb service.

The success of the 1Mb service – launched in June 2002 – has contributed to a broadband average monthly revenue rise to £25.02, compared to £24.28 in Q2.

Together with the dial-up internet services, Telewest now has more than 500,000 internet subscribers in total. “This growth is particularly pleasing given the increasing competition in the market place and against the backdrop of our balance sheet restructuring, which is progressing well,” said managing director, Charles Burdick.

There were 12,000 customer disconnections during the quarter. Telewest says that this is due to the continued effect of price rises introduced earlier in the year and the more rigorous enforcement of both installation fee and disconnection policies, in line with the group’s objective of focusing on more cash-generative customers.

Separately, the group yesterday announced the sale of its 16.9% stakeholding in SMG to institutional investors, raising £45.1 million (see Telewest Raises £45m From Sale Of SMG Stake).

Shares in Telewest stood at 1.25p by late morning today.