Telewest agrees rescue plan

NEWS Telewest has today announced a deal with creditors which will see it put an end to its debt woes after a year of financial wrangling. The deal is based on a debt-for-equity swap, where Telewest's creditors will take 98.5 per cent of the company to the tune of £3.5bn. Getting to this stage was hampered by delaying tactics from the bondholders – who were previously offered 97 per cent of the company – in an attempt to raise their eventual stake. Shares in the company rose significantly following the announcement, although the company's shareholders are unlikely to be happy with the deal, which leaves them retaining just a 1.5 per cent stake in Telewest. The agreement has prompted speculation that the company is looking to move its primary listing from London to New York – a step that would help Telewest achieve what many expect to be an inevitable merger with fellow cable company NTL. With the two companies offering broadly similar though non-competing service - with a focus on TV, broadband and phone for UK households - a parallel financial history and, following NTL's own financial restructuring early this year, sharing a key bondholder in the shape of fund manager Bill Huff, the merger is seen as the only way for the NTL and Telewest to compete with rivals BT and BSkyB. The deal is still subject to Telewest receiving agreement from its lending banks.