Following last week’s toppling of Telewest chief executive Adam Singer [WAMN: 01-Aug-02] in favour of former finance director Charles Burdick, the latter outlined his strategy for the resuscitation of the debt-crippled cable operator.
Subject to bondholder approval, Burdick (50) aims to swap around £3.6 billion ($5.65bn; €5.73bn) in bond debt for new equity, leaving its residual £1.8bn bank debt untouched – and the company, to all intents and purposes, unscathed.
But time is of the essence: “Everybody’s intention is to do this quickly. NTL did their restructuring deal in five months. That is a benchmark,” said the new md.
Bondholder group insiders have already indicated their support in principle for Burdick’s strategy, although all concerned now wait on Telewest’s bankers to make a routine dispensation to proceed.
As to the oft-mooted merger with larger cable rival NTL (like Telewest, US-owned and operating primarily in the UK), Burdick favours such a deal once debt restructuring has taken place. “My personal view is that a merger between the two companies is likely sometime, because we will end up with a lot of the same shareholders, some of whom want a quick equity pop.”
Referring to the abrupt sacking of his former boss, Burdick said: “It’s been a difficult week; there have been a lot of emotions and what’s happened has been personally upsetting. But I’m very ready to lead the company into its next phase.” He will not be paid a penny more to do so – although there will doubtless be compensations if and when he succeeds in setting the cable giant back on its feet.
Telewest also released its half-year results, posting pre-tax losses down to £239m thanks to a £90m currency exchange windfall. Revenues rose 4% to £674m. In response to these numbers - and the group’s general volatility over the last week - shares fell from £0.02 to close Friday at £0.019. In 2000 they stood at £5.63.
Data sourced from: Times Online (UK); additional content by WARC staff