UPC has filed for bankruptcy protection in the US and Netherlands ahead of a debt for equity swap designed to secure the future of Europe’s largest cable TV company.
Financial restructuring is expected to result in UnitedGlobalCom, a subsidiary of Liberty Media, increasing its share of the company to 65.5%. UPC’s remaining bondholders will retain about a third of the company while other current shareholders will hold just 2%.
Overspending on acquisitions and network upgrades led to UPC running up debts of more than E10 billion. Under the new deal, this debt will be cut to E3.6 billion removing the threat of financial collapse. In addition to its interest in UPC, Liberty has a 25% share in the UK cable firm Telewest which is undergoing similar restructuring (see Telewest Agrees £3.5 Billion Debt Deal).
