NTL gone bust!!!!
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From: Not all those who wander are lost
Cable company NTL is set to file for bankruptcy, after winning approval from banks for a rescue deal which will hand control of the firm to bondholders.
The deal, which involves exchanging $10.6bn of debt for shares in the firm, amounts to one of the biggest defaults in corporate history.
NTL said it would by Monday file for Chapter 11 bankruptcy, which will protect it from creditors while a restructuring programme, involving the company's division into two firms, is completed.
"We expect to emerge late this summer with a strong balance sheet and committed funding which is more than adequate to meet our business plan and any contingencies," NTL chief executive Barclay Knapp said.
The operations of the firm, the UK's largest cable TV firm, would be "unaffected" by the bankruptcy process, Mr Knapp added.
Key talks
The announcement follows months of speculation over the future of NTL which, while widely deemed a potentially promising company, was threatened by its debt burden.
The firm three weeks ago sealed a deal with major bondholders to swap their debt for NTL shares, and inject a further $500m into the firm.
NTL, supported by a 30-day interest payment holiday agreed with bondholders, then sought agreement with banks.
The support of banks, and major investors including France Telecom, will allow the firm to progress a restructuring set for "final consummation" by the end of September, Mr Knapp said.
Stock rejig
The deal will see NTL split into a UK/Ireland firm, initially owned 100% by current bondholders, and a Europe-focused company 86.5% bondholder controlled.
Shareholders including France Telecom will own the balance of shares in the European firm, and the right to buy a holding in NTL UK and Ireland.
"Our plan will achieve virtually all the objectives we set for ourselves in January," Mr Knapp said.
"Although there is still work to do to implement the agreed upon plan, we are optimistic we will be able to compete the recapitalisation in an expeditious manner."
A separate deal announced on Thursday has secured "continued funding" for Cablecom, NTL's Swiss subsidiary, which had looked close to bankruptcy.
City reaction
News of the deal helped revive flagging spirits in the media sector, hit by the closure of ITV Digital and the axing of 1,500 jobs at UK cable firm Telewest.
In the City, shares in Reuters, which fell to among their lowest levels for 3.5 years in morning trade, recovered to stand up 8.5p at 482p by 1515 GMT.
Telewest shares returned to their opening level of 10.5p, having earlier hit 9.25p.
The deal, which involves exchanging $10.6bn of debt for shares in the firm, amounts to one of the biggest defaults in corporate history.
NTL said it would by Monday file for Chapter 11 bankruptcy, which will protect it from creditors while a restructuring programme, involving the company's division into two firms, is completed.
"We expect to emerge late this summer with a strong balance sheet and committed funding which is more than adequate to meet our business plan and any contingencies," NTL chief executive Barclay Knapp said.
The operations of the firm, the UK's largest cable TV firm, would be "unaffected" by the bankruptcy process, Mr Knapp added.
Key talks
The announcement follows months of speculation over the future of NTL which, while widely deemed a potentially promising company, was threatened by its debt burden.
The firm three weeks ago sealed a deal with major bondholders to swap their debt for NTL shares, and inject a further $500m into the firm.
NTL, supported by a 30-day interest payment holiday agreed with bondholders, then sought agreement with banks.
The support of banks, and major investors including France Telecom, will allow the firm to progress a restructuring set for "final consummation" by the end of September, Mr Knapp said.
Stock rejig
The deal will see NTL split into a UK/Ireland firm, initially owned 100% by current bondholders, and a Europe-focused company 86.5% bondholder controlled.
Shareholders including France Telecom will own the balance of shares in the European firm, and the right to buy a holding in NTL UK and Ireland.
"Our plan will achieve virtually all the objectives we set for ourselves in January," Mr Knapp said.
"Although there is still work to do to implement the agreed upon plan, we are optimistic we will be able to compete the recapitalisation in an expeditious manner."
A separate deal announced on Thursday has secured "continued funding" for Cablecom, NTL's Swiss subsidiary, which had looked close to bankruptcy.
City reaction
News of the deal helped revive flagging spirits in the media sector, hit by the closure of ITV Digital and the axing of 1,500 jobs at UK cable firm Telewest.
In the City, shares in Reuters, which fell to among their lowest levels for 3.5 years in morning trade, recovered to stand up 8.5p at 482p by 1515 GMT.
Telewest shares returned to their opening level of 10.5p, having earlier hit 9.25p.
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