Microsoft takes members off Telewest board
Microsoft took its three nominated representatives off the board of the troubled cable company Telewest yesterday in a move that could see the US software giant exit the business.
The company said it was removing its three non-executive directors – Henry Vigil, Salman Ullah and Dennis Durkin – from the Telewest board with immediate effect.
"At present we believe that we will be in a better position to manage our relationship with, and investment in, Telewest without board representation," said Microsoft, which owns 23.6 per cent of Telewest.
Analysts said, however, that the move was designed to give Microsoft "maximum flexibility" over what to do with its shareholding and seemed certain to result in the company at least reducing its stake.
"They've done it, I think, to avoid being insiders at Telewest. It will basically give them more freedom to do what they want," one analyst said. "I would imagine they're considering, at the very least, cutting their holding."
While Microsoft said it had taken no decisions over what to do with its shareholding in the company, it admitted it was mulling its options.
"Microsoft expects to continue to evaluate Telewest on an ongoing basis and, in that regard, will continue to consider, among other things, purchasing or selling Telewest securities or engaging in possible strategic transactions involving Telewest," the US company said yesterday.
Microsoft, which has the right to nominate up to three representatives of the cable company's board, said, however, that it had no current plans "regarding any such transactions". But it reserved the right "to change its plans at any time".
The decision comes as speculation mounts that Telewest, which has just over £5bn of debt, will be forced to carry out a major financial restructuring.
While it has taken no decisions, it is widely expected to carry out a debt for equity swap, similar to the exercise that its rival NTL is currently carrying out.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies