Malone Finds Back Door into NTL with Bond Purchase Plan

19 April 2002

It was thought that the debt restructuring plan recently unveiled by the UK’s largest cable-TV operator, US-listed NTL, had foiled attempts by cable guru John Malone to buy a hefty stake in the company. Malone, however, appears to have different ideas.

As revealed earlier this week [WAMN:17-Apr-02], NTL has agreed to hand over control of nearly all the company to its bondholders in a debt-for-equity swap. The deal followed the rejection of a $2 billion (€2.27bn; £1.39bn) cash bid for the group from Malone’s Liberty Media [WAMN: 10-Apr-02].

Undaunted by this setback, the cable mogul has come up with a new plan: become a bondholder and take part in the debt-for-equity exchange.

He has sent a letter to NTL chief executive Barclay Knapp requesting support for the purchase of sufficient bonds to give him up to 30% of the restructured firm. This would make Malone NTL’s biggest single shareholder and provide him with a chance to take over the company’s management.

It is as yet unclear what response either NTL or its bondholders will give to the request – or indeed whether Malone even requires the company’s support to begin negotiating the purchase of bonds.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff