Telewest Agrees £3.5 Billion Debt Deal

Telewest Communications, the struggling UK cable firm, has reached an agreement with bondholders to eradicate £3.5 billion of its £5.3 billion debt in return for 97% of the company’s shares. It has also deferred the repayment of £68 million of interest on bonds as it seeks further approval from investors.

The debt for equity swap marks the first stage of the financial restructuring programme instigated by new managing director, Charles Burdick. Shareholders are to be left with just 3% of Telewest but Burdick emphasised that the deal “would put the company on a sound financial footing”.

The deal now needs the backing of major shareholders such as Microsoft and John Malone’s Liberty Media. The American cable magnate has a 25% stake in Telewest and is looking to consolidate his interests in Western Europe. He is believed to be in favour of a merger between Telewest and NTL, its UK rival, which is also undergoing restructuring.

Subscribers to MediaTel Insight can access this report in full, along with more national and international media analysis, forecasts and news. For subscription details please visit the site.