Cable operator Telewest is struggling to win support of enough bondholders to push through its massive debt-for equity restructuring.
Telewest – US-owned but operating chiefly in the UK – is trying to wipe out £3.5 billion ($5.8bn; €4.9bn) of debt by handing control of the company to owners of bonds. However, a self-appointed bondholder committee liaising with the firm’s management has requested further alterations to the deal, delaying agreement yet again.
“In order to obtain the support of certain of the company's bondholders,” stated the cable group, “the bondholder committee is requesting certain changes to the economic and other terms of the preliminary restructuring agreement.”
Bondholders, already due to receive 97% of the firm’s equity, are believed to be holding out for more – as much as 99% according to some reports. The deal needs to be approved by 75% of bondholders before it can be presented to the high court.
Telewest recently signalled it would force through the deal despite objections from Bill Huff, one of its biggest bondholders [WAMN: 30-May-03]. However, such resolve seems to have dissolved – the board has reportedly caved-in to pressure from Huff and other rebel bondholders by agreeing to offer a greater equity stake.
This could delay the deal for several weeks. Nevertheless, managing director Charles Burdick put a brave face on it: “While we are disappointed with this development,” he commented, “we are in the final stages of these discussions and, therefore, the restructuring process.”
Data sourced from: MediaGuardian.co.uk; additional content by WARC staff