NTL: Bankruptcy report 'speculation'

April 1, 2002 Posted: 4:30 AM EST

British cable TV operator NTL has seen debt mount to $17 billion

LONDON, England - Debt-laden British cable television operator NTL dismissed as "speculation" a report that it is about to file for Chapter 11 bankruptcy protection in the United States.

A report in Sunday's Observer newspaper in London said the company, which is about $17 billion in debt, would seek court protection from its creditors.

NTL spokeswoman Alison Kirkwood told CNN the report was "just speculation and we don't comment on speculation."

Last week, NTL admitted it could run out of money before it is able to restructure its finances.

The company, which is based in the UK but is publicly listed in the United States, reportedly must pay $95 million in interest over the next few days to avoid defaulting on its debt.

Also last week, NTL posted a $16 billion loss for 2001 and announced that it was being delisted from the New York Stock Exchange because its share price had fallen below limits set by the exchange.

NTL's share value has plunged from $38 to 20 cents in the past year as debt concerns have mounted. The company said it expected to begin trading on the much smaller U.S. over-the-counter market very soon.

The company has also had its credit rating cut by Standard and Poor's to below junk or speculative status.

"The downgrade reflects a significant risk that NTL will default on its financial obligations during 2002, either by the way of a bond restructuring or running out of cash," Leandro de Torres Zabala, of S&P Corporate Ratings, told Reuters.

But analysts believe NTL can still survive if the company meets its target to complete restructuring of its debt by the third quarter.

NTL is also negotiating with potential investors about a cash infusion. U.S. cable group Liberty Media confirmed on Thursday it was in talks with the company.

Primarily a cable TV operator, NTL also provides telephone and Internet access over its networks. It has about 8.7 million subscribers, mainly in Europe. It has 3 million customers in the UK.

In December, NTL announced it was cutting 2,000 more jobs and freezing managerial pay in an effort to reduce costs.

The company, which has axed nearly 5,000 jobs in the past year, said the cuts would go in the UK under a compulsory and voluntary redundancy programme, reducing its UK workforce to 13,000.

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