NTL close to restructuring deal

UK cable giant NTL is attempting to restructure its $17.5 billion in debt

LONDON, England - NTL appears close to a deal to transfer ownership of the debt-laden UK cable group to its bondholders and avoid bankruptcy.

The deal -- which could be announced as early as this week -- would involve a debt-for-equity swap, giving bondholders a 95 percent stake in the group, according to reports.

The bondholders may also be asked for a cash injection of $500 million.

The deal is expected to wipe out about $11 billion of the NTL's $17.5 billion debt, which has been built up by rapid expansion and acquisitions. Another $6 billion in debt is held by creditor banks.

NTL, which is based in the UK but is publicly listed in the United States, reportedly has until May 1 to pay $74 million in interest. Last month, the company admitted it could run out of money before it was able to restructure its finances.

Also last month, 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 is now trading on the much smaller U.S. over-the-counter market.

If a deal is reached, it would end two months of complicated negotiations with bondholders. In January, NTL appointed three investment banks -- Credit Suisse First Boston, JPMorgan and Morgan Stanley -- to assist in restructuring the company's debt.

The talks have involved France Telecom, which owns a large stake in NTL, and potential partners such as Liberty Media Corp. and AOL Time Warner Inc, according to reports.

On Friday, U.S.-based Liberty Media said it had terminated talks to buy NTL, setting the stage for bondholders to seek an ownership deal themselves.

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.

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