Telewest set for £5.3bn debt swap

Richard Inder12 April 2012

STRICKEN cable TV group Telewest Communications has admitted it's likely to swap most of its £5.3bn debt for shares. A day after ousting chief executive Adam Singer, Telewest said it had asked banks to give the go-ahead for refinancing talks with bondholders who are owed £3.5bn.

Newly appointed managing director Charles Burdick said: 'We're moving down the steps to a debt-for-equity swap. The probability is higher than 90%.' Burdick said banks were likely to agree to the talks because their £1.8bn of loans were not under threat.

Shareholders - even in the worst case - would retain some value. Telewest was flat at 2p, valuing it at £65m - well off its peak of £16bn. Burdick would not say how long the refinancing talks would take.

The admission is a further slap in the face for Singer, who once boasted he was 'more likely to run off with Cindy Crawford' than be forced into a debt swap. Non-executives forced his resignation because they felt he had not fully involved them in talks about Telewest's future.

Burdick said the group was also looking at asset sales, including its 17% stake in Scottish radio and TV group SMG, worth £55m. It would probably retain its TV programming arm, Flextech, bought for £2bn two years ago.

Telewest revealed it lost 13,000 customers in the three months ended June 30 as they balked at price hikes. Over the same period last year it gained 20,622. First half pre-tax losses narrowed from £413m to £239m.

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