Europe’s number one cable operator, United Pan-European Communications, has filed for bankruptcy protection in the US and the Netherlands.
The move, which will not impede the group’s day-to-day operations, was expected as part of a complex restructuring scheme to ease its mountainous debt burden [WAMN: 02-10-02]. Like British cable firms NTL and Telewest, UPC hopes to swap billions of dollars of debt for large stakes in a reorganised firm.
Under the scheme, $2.5 billion (€2.5bn; £1.6bn) of bonds and loans held by parent firm UnitedGlobalCom will be wiped out in exchange for a 65.5% stake, allowing US group Liberty Media to retain control of UPC via its 72% holding in UGC.
Other creditors will receive a 32.5% stake in a restructured UPC in return for cancelling $2.9bn in bonds. Filing for bankruptcy protection is expected to help the cable giant reach an agreement on the scheme.
Data sourced from: The Wall Street Journal Online; additional content by WARC staff