UK cable operator NTL is to proceed with a $1 billion rights issue as it seeks to reduce its debt burden and generate new business in the UK.
The
Sunday Times reports that the company has received the backing of two major shareholders, WR Huff Asset Management and Franklin Mutual Advisors, and hopes to save £100 million a year in interest payments. Proposals for the forthcoming rights issue have now been filed with the US Securities and Exchange Commisssion.
NTL will use $582.5 million of the money raised to pay off a long-term bond set up when the group emerged from bankruptcy protection at the start of 2003 (see NTL Emerges From Bankruptcy). A further $340 million will be put towards repayment of a $650 million working capital facility.
Barclay Knapp stepped down as chief executive of NTL last month and has been replaced by Simon Duffy, former finance director of mobile telephone group Orange (see Knapp Departs NTL As Q2 Results Show Some Growth).
