Stricken NTL plans new option scheme

The troubled cable firm NTL plans to award its senior management team a potentially lucrative share option scheme once the company has emerged from Chapter 11 bankruptcy protection.

The move comes as NTL's bondholders prepare to seize control of the business at the expense of shareholders as part of a rescue restructuring package that will see $10.6bn of debt converted to equity.

In the Chapter 11 documents filed in the US, NTL said it would create an incentive plan for both its UK operation and its European arm and said options to buy up to 10 per cent of each operation would be granted to key executives.

For "New NTL", that would see the company reserving up to 20 million shares for issuance under the incentive scheme while "Euroco" would reserve up to 2 million shares.

As part of its restructuring, NTL will be divided into two businesses – NTL UK and Ireland and NTL Euroco. The company's bondholders will gain 100 per cent of the UK business and about 86.5 per cent of the European operation.

In addition, the company said the board of directors of "New NTL" would be comprised of nine members, including a chairman and chief executive, selected by a steering committee of bondholders.

Those nine individuals, it said, would be named in documents to be filed over the coming weeks alongside any changes to the existing management of NTL Inc.