Banks look likely to force the end of Barclay Knapp's tenure as CEO of UK cable company NTL Inc. They are demanding that he sell his controlling 51 per cent equity stake if an interested buyer can be found that can inject new funds into the company, Patrick O'Brien writes.

Liberty New Media, AOL Time-Warner, Microsoft, and Vivendi have all been linked to the New York listed company. So far NTL has kept very quiet about how it plans to stave off bankruptcy, but earlier this month it brought in Credit Suisse First Boston to advise on ways of restructuring its enormous $17bn debt.

Storm clouds have also been gathering over the company as speculation grows that it is in danger of breaching some of its bank covenants and could be about to issue a profit warning.

NTL refused to comment on the possibility of a new investor, the role of CSFB, or restructuring its debt, and pointed only to its announcement last year that it would meet or exceed its fourth-quarter and 2001 EBITDA targets, and faces no immediate liquidity concerns.

Last month it said it planned to reduce its workforce to 13,000 employees, freeze its managers' pay, and review all operating and capital costs. The cuts were part of a new business plan that it said it would announce in early in 2002. The announcement is expected to be made in the next month and will include some details on how it proposes to deal with its dire financial position.

An article in one national UK newspaper said that NTL may issue a profit warning this week, and the Financial Times reported that by April it may breach some of its bank covenants, which are linked to its EBITDA performance, and will become more stringent in the second quarter of 2002.

One investor with more cause for concern than most is France Telecom SA, which has an 18% stake in NTL as well as $5bn in convertible bonds and $750m in preferred shares, and may be forced to purchase another $1.1bn in preferred shares under an option agreement.

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