NTL on the verge of filing for Chapter 11 bankruptcy

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The Independent Online

The troubled cable television company NTL was poised to file for Chapter 11 bankruptcy protection in the US last night as part of a wider restructuring plan aimed at restoring its financial health.

The troubled cable television company NTL was poised to file for Chapter 11 bankruptcy protection in the US last night as part of a wider restructuring plan aimed at restoring its financial health.

The company was putting the finishing touches to the 400-page document with its advisers. A company spokesman said the move, which was widely expected early yesterday, had been slightly delayed to ensure the wording of the document was "100 per cent accurate".

Analysts are hoping the document will set out new financial targets to back the revised business plan NTL has agreed with its financial backers. The filing comes less than a week after the company confirmed its rescue deal had won approval from committees representing both banks and bondholders.

Under the terms of that deal, the company's bondholders will seize control of the business by converting some $10.6bn (£7.2bn) of debt into equity while injecting an extra $500m of cash. The process is expected to see the company emerge from Chapter 11 toward the beginning of September with some $5.8bn of debt, $11.7bn less than current levels.

It will also ensure NTL will be able to continue paying suppliers while pushing out its cable TV, telephone and internet services to its customers as normal.

Barclay Knapp, NTL's chief executive, will stay on in the top job at least until the company emerges from protection and has completed its restructuring.

Analysts predict the company will end up joining forces with rival business Telewest, which is also expected to carry out a restructuring similar to the NTL deal.

Last week Telewest, which has just over £5bn of debt, laid bare plans to axe 1,500 jobs to save it some £40m to £50m a year. The company admitted it was "looking at all options" to strengthen its financial position including asset sales and a debt-for-equity swap.

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