NTL hopes for transmission arm sale fade
LONDON - NTL's hopes of selling its broadcasting transmission business this side of Christmas appeared to be under threat with the news that potential buyer and NTL shareholder France Telecom has failed to offer the £1.5bn the cable group wanted to raise from the sale.
The French telecom group is NTL's largest shareholder with a 25% stake. It is said to want to expand its transmission business TDF, while providing NTL with extra cash.
However, NTL is keen to raise enough money to help meet interest payments on its £11bn debt mountain and begin cutting into the capital.
NTL's interest payments were blamed for the company's third-quarter losses which widened to £704m.
The transmission arm provides some of the highest margins among NTL's operations and contributed £32m to NTL's earnings before interest, tax, depreciation and amortisation of £132m.
News about the sale of the company comes at a difficult time for NTL, which last week saw its credit rating cut, placing it further down among the "junk" ratings scale.
Moody's, the credit rating agency behind the downgrade, said the company may have to restructure its balance sheet in order to grow.
NTL's shares dropped to an all-time low of $1.60 on the New York Stock Exchange after the downgrade but rose 15.6% to trade at $1.85 on Friday, well off its high of $109.
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