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Future of UPC in “Substantial Doubt”, Says Auditor

News, 15 April 2002


The future of United Pan-Europe Communications – Europe’s largest cable operator, with 7.2 million TV subscribers – hangs in the balance after the company posted losses for 2001 more than double those the year before.

In a statement within audited results filed with the US Securities and Exchange Commission on Friday, UPC’s auditor Andersen revealed the group has a “net capital deficiency that raises substantial doubt about its ability to continue as a going concern.”

Survival depends on agreeing a €6.5 billion ($5.7bn; £4bn) debt restructuring, essential to which is John Malone’s investment vehicle Liberty Media, owner of 72% of UPC’s American parent United GlobalCom. Failure to do so could prompt a cessation of payments or bankruptcy, UPC admitted.

The European cable group posted a net loss of €4.4bn last year, widening from €2bn in 2000. Contributing to the shortfall was a €1.5bn write-down of the company’s fixed assets. Revenues jumped 38% last year to €1.38bn, but at the end of 2000 UPC had just €855m in cash and equivalents, little over half the €1.59bn twelve months before.

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