NTL delays sale of transmission business
LONDON - Cash-strapped cable operator NTL is being advised to delay the sale of its broadcast transmission business rather than accept an offer which is lower than the division's estimated £1.6bn value.
NTL owes £12bn to banks in the US, where it is listed, and in the UK, and pressure is mounting on chief executive Barclay Knapp to restructure the business to avoid bankruptcy.
Knapp is currently looking at a number of ways of raising cash, including selling the transmission business, which would help it pay off the £2.6bn it owes to UK banks including Royal Bank of Scotland and the Bank of Scotland.
However, the division brought in £32m of the company's £131m earnings before interest, tax, depreciation and amortisation in the quarter to September 30.
NTL's biggest shareholder, France Telecom, which owns 25% of the cable operator, is the most likely buyer for the business but it is thought to have offered less than £1bn. However, the company is being advised against selling it for less than its value and not to rush through a sale.
NTL is having to look at other ways to stop investors abandoning its stock. On Monday, it announced that it is to axe a further 2,000 jobs on top of the 6,000 it has already cut this year.
It is also beginning to implement plans to lower the cost of connecting new subscribers while realising more cash from existing subscribers in order to allay fears about future funding of the company after 2003.
The company is thought to have enough cash to reach 2003, but it will then be left with £5m in cash, enough to pay two days' interest payments.
If NTL collapsed, it would be the biggest bankruptcy to date with debts of over £14bn. This would beat the recent collapse of energy group Enron, which owed £7bn.
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