UK cable group NTL has been cleared by a US Bankruptcy Court to begin the financial and organisational restructure of the business, which previously sat on top of a £12 billion debt mountain (see NTL Revenues Fall Slightly As Recapitalisation Approaches).
The company’s emergence from the US’ Chapter 11 bankruptcy protection will allow it to reorganise into two new groups, operating as NTL Incorporated and NTL Europe. It is expected to exit the Chapter 11 period in October.
NTL Inc will be a holding company for the UK and Ireland operations, whilst NTL Europe will hold the group’s businesses and investments in continental Europe. Speculation is that the NTL Europe division will be sold off as soon as possible, leaving CEO Barclay Knapp free to concentrate on the group’s UK and Ireland cable businesses.
The debt-for-equity financial restructure should see the group halve its current debt burden. Rival group Telewest Communications, with which NTL is ultimately expected to merge, is currently on the verge of its own debt-for-equity swap (see Telewest Gains Bank’s Consent For Restructure).
Commenting on the Court’s decision, Knapp said: “We are extremely pleased to be emerging from these cases so quickly. We believe we have taken the steps needed to solidify NTL’s financial position for the future.”
