The rescue restructuring planned by the troubled cable company Telewest hit a stumbling block yesterday that could see existing shareholders left with even less of the business than originally feared.
The group said yesterday that bondholders were demanding last-minute changes to the terms of its planned debt-for-equity swap which would have left shareholders with just 3 per cent of the business.
It is thought that the rebel bondholder Bill Huff, who runs a hedge fund bearing his name, has again put his foot down to the deal on the table after previously objecting to numerous facets of the proposal.
While Telewest insisted yesterday it thought the rescue deal would still get done, it conceded that further talks with bondholders and other stakeholders were now needed.
The company said it had been notified by the bondholder committee that "certain changes to the economic and other terms of the preliminary restructuring agreement" would be needed to get the support of "certain" bondholders.
Telewest, which is holding its annual general meeting on Thursday, said yesterday it remained committed to a deal that balanced the interests of all the stakeholders "as fairly and equitably" as possible.
But the renegotiation of the terms of the rescue plan almost certainly mean that existing shareholders will get even less than a 3 per cent share of the restructured company.
Charles Burdick, Telewest's managing director, said: "While we are disappointed with this development, we are in the final stages of these discussions and therefore the restructuring process."
Contrary to recent speculation, Mr Burdick is not thought to have been put under any pressure to leave the business. "He's necessary to the deal and they [stakeholders] want him there post the restructuring," one source said.
Mr Burdick also said Telewest continued to perform "fully in line" with management's expectations. In the first quarter of the year, the company's losses widened to £186m from £167m in the same quarter a year before, while sales were £335m compared with £334m.
Last month, Microsoft offloaded all its shares in Telewest for just $5m (£3m). The US software giant, which had long been expected to sell the 23.6 per cent stake, bought the stock three years ago for about $2.5bn.
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