Debt-beset cable company NTL – listed in the US but operating mainly in the UK – missed its scheduled payment of $96 million in interest payments due Monday.
The firm announced that it had enough cash to meet the charge – which relates to bonds worth $1.3 billion (€1.5bn; £0.9bn), just a fraction of the $17bn debt mountain under which NTL is struggling – but was asked by an unofficial group of bondholders to withhold payment to allow the firm breathing space.
NTL has been given a 30-day grace period in which to pay the $96m before being technically in default of its bonds, at which point creditors could ask the group to file for Chapter 11 bankruptcy protection.
The cable company is said to be considering placing its American units under Chapter 11 in order to improve the survival chances of its European divisions. It is planning a huge debt-for-equity exchange in order to refinance its debts.
A further bond interest payment of $18.9m is due today (Tuesday), this time relating to its British Diamond Cable arm. NTL is expected to pay this so as to prevent its European operations from being connected with stateside bankruptcy proceedings.
Data sourced from: The Times (London); BBC Online Business News (UK); additional content by WARC staff