AOL TW Mulls Cable-TV U-Turn

15 July 2003

AOL Time Warner may cancel the flotation of its cable-TV business as it finds other ways to cut its debt.

Attending the annual get-together of media’s major players [WAMN: 11-Jul-03], AOL TW chairman/ceo Richard Parsons told reporters that the giant has not yet “pulled the trigger” and confirmed the expected IPO of Time Warner Cable.

In April, AOL TW delayed the timing of the flotation from this summer to the latter end of 2003 as federal investigators stepped up their probe of the group’s accounts.

Those plans are still in place, but the media mammoth may still abandon the IPO altogether as other ways emerge for slashing its $26 billion (€23bn; £16bn) debt. Other options include offloading sports teams and music units, while an unforeseen $750 million payment from Microsoft to settle a competition lawsuit has also relieved the pressure [WAMN: 02-Jun-03].

AOL TW owns a 79% stake in TWC, which was formed earlier this year after the unravelling of the Time Warner Entertainment cable-and-content partnership with Comcast [WAMN: 02-Apr-03].

Speaking to the press outside the meeting (to whose sessions reporters are not privy), Parsons also insisted there was “no pressure” on under-fire former chairman Steve Case to step down from the board.

Case – head of America Online before its merger with Time Warner – is unpopular among some shareholders, notably Capital Research, one of AOL TW’s biggest investors. Also attending the conference, he denied he was under pressure to quit and vowed to continue on the board.

Data sourced from: The Washington Post Online; additional content by WARC staff