Telewest Faces Bondholder Revolt Over Debt Swap

30 March 2004

Minority bondholders in cable company Telewest are planning legal action over the firm's financial restructuring.

The US-owned company -- which operates chiefly in the UK -- is planning to wipe out £3.5 billion ($6.4bn; £5.2bn) of debt by issuing new shares. This stock will be listed on the Nasdaq exchange.

However, a group of bondholders whose debt is sterling-based is unhappy at the exchange rate that will be used to calculate what they get out of the deal. Telewest wants to apply the average dollar-to-pound level since October 2002, but the rebels think the firm should use the currency values on the day of the exchange (likely to be more beneficial to holders of sterling bonds).

The majority of Telewest bonds are dollar-based, and the legal action is unlikely to gain enough backing to overthrow the deal. However, the court case could further extend the already protracted restructuring process.

Data sourced from: Financial Times; additional content by WARC staff