Analysts claim that the cable television company NTL is set to announce a major fund raising exercise that will net around $650 million and increase the possibility of a merger with UK rival Telewest.
According to a report in
The Observer, NTL is planning to ask shareholders to subscribe to new shares with the cash going to redeeem some $500 million of bonds and provide the group with working capital to invest in the business.
US-owned NTL emerged from Chapter 11 bankruptcy protection in January after creditors agreed to swap $10.9 billion in debt for equity (see NTL Emerges From Bankruptcy). This sparked a return to growth in the first quarter (see NTL Returns To Growth After Chapter 11) and the company’s share price has since leapt to $40 a share.
American shareholders now believe that NTL will be in position to merge with Telewest in the first half of 2004. However, the latter still needs to complete its own debt for equity swap. The process was held up while bondholders pressed for a greater share of the group’s equity (see Bondholders Push For More In Telewest Debt Swap) but the deadlock has now been resolved.
As a result, banks and bondholders will get 98.5% of Telewest shares with the remaining 1.5% going to existing shareholders (see Telewest To Reduce Shareholder Stake). First half results were encouraging and the company hopes to make further progress in the rest of 2003 (see Telewest Looks To Turn Corner In Second Half).
