Telewest chiefs defiant over bonuses

The cable company Telewest yesterday defended bonuses it handed out to its management team last year as it admitted it could be forced to carry out a major financial restructuring.

Adam Singer, its chief executive, told shareholders at a packed AGM in London yesterday that the company was still considering all options to secure its financial position.

"There has been endless speculation these last three months that we'd be forced into a balance sheet restructuring and perhaps a debt-for-equity swap," he said. "I cannot promise you today that such an event [a debt-for-equity swap] will not take place."

The admission came as angry shareholders attacked the company's directors for accepting cash bonuses while Telewest's share price fell.

One shareholder, who asked how the company could pay out bonuses when it was "on its knees" and who urged the company's board to take a pay cut, won a round of applause.

The company's chairman, Anthony Stenham, defended the payments, saying they were necessary to "attract and retain" quality directors.

In particular, he said the £283,000 bonus paid to the finance director, Charles Burdick, was "crucial" since it related to his role in securing new credit facilities and that Telewest would have been in a "sorrier state" had that deal not been signed.

Mr Singer, who said he felt "extreme disappointment and severe frustration" at the circumstances Telewest currently found itself in, said the company continued to perform in line with trends reported at the start of May.

While he pledged management would do its "absolute damnedest" to resolve the current financial position, he said: "The truth is there are no easy answers. If there was a magic bullet, we would have fired it."

Separately, rival company NTL, which recently filed for Chapter 11 bankruptcy protection in the US and which is carrying out a debt-for-equity swap, said it remained on course to get that process completed by the end of the third quarter.

Barclay Knapp, the chief executive of NTL, said: "We are confident that that is still going to be the case [completing the recapitalisation by the end of the third quarter]."

Nevertheless, NTL warned it expected growth in the current year to be "curtailed" by funding constraints.Mr Knapp said he was expecting the company's recapitalisation plan, which will cost it about $96m (£66m), to gain approval at a 12 July hearing.

In the three months to 31 March, NTL's underlying profits from continuing operations were £172m, up from £83m a year earlier. Sales were £639m, up from £614m.