Encouraged by the recent rise in the value of its stock, the board of US-owned NTL, recently emerged from Chapter 11 bankruptcy protection, is mulling a substantial increase in its upcoming rights issue.
Originally planned for just over $1 billion (€0.86bn; £0.60bn), the UK-based cable operator is now thinking along more grandiose lines of almost $1.4bn. Encouraged by NTL's underwriters Goldman Sachs, Deutsche Bank and J P Morgan - who stand to inflate their already eyewatering fees if the issue is increased - the company's independent directors see a larger rights issue as a way to redeem more of the group's high interest debt.
It would also bolster NTL financially as it gears up to take over its sole UK cable rival Telewest, also US-owned, after the latter has completed its own restructuring. The deal is unlikely to be inked before 2005.
Increasing the NTL rights issue requires permission from US regulator, the Securities and Exchange Commission. But even at its present level of $1 billion, the underwriters and other advisors stand to cream $31m from the deal.
Data sourced from: Financial Times; additional content by WARC staff