Telewest director quits over terms of rescue deal

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The Independent Online

Telewest suffered another blow yesterday after one of its non-executive directors, Stanislas Yassukovich, resigned in protest over the proposed terms of the cable company's £5.3bn rescue financial restructuring.

The move was, however, interpreted as a sign that the company - which has been negotiating with its banks and bondholders for the best part of the last 18 months - was close to announcing it had finally got the rescue package signed off.

The cable group said yesterday that Mr Yassukovich's resignation reflected a difference of opinion with the rest of the Telewest board "on the revised terms of the proposed restructuring".

Telewest was recently forced to alter the terms of the deal after bondholders objected. Under the revised terms, shareholders are set to end up with just 1.5 per cent of the company's equity compared with 3 per cent previously. But one of the other changes that the bondholders - who are agreeing to take 98.5 per cent in exchange for the cancellation of about £3.5bn of debt - are said to have demanded is that the company be moved to the US and its shares listed on Nasdaq.

It is that issue which is said to be behind the resignation of Mr Yassukovich, a former deputy chairman of the London Stock Exchange. Sources said Mr Yassukovich, who is known as Stani, had serious concerns about corporate governance issues. "This is not about the economics of the deal ... moving [Telewest] to the US means there'd be different corporate governance," one source said.

In his letter of resignation, Mr Yassukovich wrote: "As you know, I never accepted the decision of the ad hoc committee of bondholders to renegotiate the terms of the restructuring as originally agreed, albeit on a non-binding basis. As I consider the revision of the terms to be prejudicial to the interests of all the stakeholders, I could not join in what you would correctly wish to be a unanimous recommendation to shareholders."

Nevertheless, Mr Yassukovich's resignation seems to signal Telewest is close to announcing it has completed its debt-for-equity swap. "The documents will soon be filed. It could be in the next fortnight, even next week," said one source.

Mr Yassukovich said: "As the formalities for completion of the restructuring arrangements must now be undertaken, it is appropriate that I now resign from the board."

For the restructuring to go ahead officially, it needs the backing of the banks, who are owed about £2bn, as well as the bondholders.

Cob Stenham, the chairman, said: "In the circumstances faced by the Telewest group, we have concluded that a restructuring on the revised terms remains in the best interests of our stakeholders."

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