NTL slips as market gets jitters

Testing time ahead

By Tim Richardson, 18th December 2001

Steps to Take Before Choosing a Business Continuity Partner

NTL Inc's share price dipped $0.11 (15.49 per cent) to $0.6 cents in early morning trading following a weekend of speculation about the cableco's future.

The Observer reported that NTL could be about to be taken over by its banks in a move which would clear the way for a merger with rival cableco, Telewest.

If successful, part of NTL's $17 billion debt would need to be cancelled in return for an equity stake, the newspaper said.

Earlier today Bloomberg reported that some of NTL's investors are calling on the company to seek Chapter 11 bankruptcy protection in a bid to save money and help it continue to trade.

NTL operates in the UK but its shares are traded in the US.

NTL's troubles are compounded following a number of reports which claim that NTL is set to abandon the sale of its masts business - which makes up more than a third of the company's revenues - because the offer on the table fails to meet its expectations.

NTL's top management are due to meet today to discuss the cableco's future, although it's understood that the meeting is a long-standing engagement and not hastily convened because of the current problems.

A spokesman for NTL declined to comment on the other matters claiming they were merely rumour and speculation.

Last week NTL cut an additional 2,000 staff, froze pay and introduced a sweeping round of cost cutting measures in a bid to stem its debt problem.

It also moved to calm market jitters by publishing a statement in which it said it was "fully able to meet all of its current trade obligations and interest payments". ®