Telewest CEO ousted in boardroom putsch
Debt swap 'close to inevitable'
Adam Singer, Telewest's CEO, was deposed yesterday in a boardroom putsch orchestrated by the firm's non-executive directors.
His replacement, Charles Burdick, formerly FD, is to concentrate on navigating the company through a 'close to inevitable' debt for equity swap in coming months.
In an interview, Burdick said his predecessor was the wrong man to lead the company through restructuring.
"As we go through the next six months, as we sort out our balance sheet, it is very important that we focus on maintaining our leadership in broadband data and having a ruthless focus on costs.
"What is not needed is a more visionary, strategic approach to life... It is very important the operations are focused on the way they are today rather than the world as it might be in five years' time."
Telewest today released its half yearly results. All the consumer figures are going in the right direction, but the business division saw revenue falls compared with last year's. interims. Group turnover advanced 4 per cent to £648m (£674m) and Earnings Before Bad Stuff (EBS) jumped 30 per cent to £184m (£142m). Costs are down too - with Capex (mostly cable laying) falling 25 per cent.
Revenues per household are up seven per cent to 41.72 (£39.07) and the company claims 192,000 broadband customers, of which 15,000 have signed up for the firm's new 1MB service.
Good stuff, but not enough to satisfy interest and capital repayments on the firm's £3.5bn debt. Telewest used to look relatively healthy alongside NTL, but recent restructuring has seen its bigger colleague restore its balance sheet to something like sanity. This in turn has increased pressure on Telewest to reach accommodation with its banks and bondholders. The UK cable endgame will see NTL and Telewest merged with Liberty, the US cable giant and 25 per cent stakeholder in Telewest, commanding a significant, perhaps controlling, presence in the enlarged entity. But first Telewest has to get its act together.
In a statement today, Telewest said:
"As we communicated to our shareholders on 4 July 2002, our board has concluded that it is in the best interest of Telewest to enter into discussions with the Bondholders' Committee and, if approached, Liberty Media to establish whether a proposal which could command the support of the board is capable of being agreed. Our board will continue to progress all available options in order to arrive at a solution, which is fair and equitable to all stakeholders. Detailed discussions will not begin until we have obtained the necessary waivers and consents from our banks." ®