Telewest to scrap pounds 450m flotation after fall in market

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The Independent Online
TELEWEST, the largest cable television operator in Britain, is expected to call off its planned flotation on the London Stock Exchange because of the downturn in the equity market. Since the start of the year the FT-SE 100 has fallen almost 400 points to 3,020.

Telewest hoped to raise about pounds 450m this summer by listing 25 per cent of its shares, valuing the company at about pounds 1.85bn. The money raised would have been used to finance the building of Telewest's cable networks in the UK, due for completion by 1998.

Talks between the company and its advisers were under way last night and an announcement is expected today.

'We are keen to involve the UK institutions but the market has become increasingly tough,' said a source close to the discussions. 'We don't need to sail into choppier and choppier waters. It would be better to stand still and wait for conditions to improve.'

Yesterday General Cable, which has cable television franchises in London, Birmingham and Yorkshire, confirmed it was postponing flotation plans. The company, a subsidiary of Generale des Eaux of France, was expected to raise pounds 200m, valuing it at up to pounds 500m. Earlier this week the planned flotation of London Capital Holdings, a West End property company, was also scrapped.

Telewest, jointly owned by US West, a regional telephone company, and Telecommunication Inc, is likely to say that its investment plans will not be affected by deferring the flotation, which may go ahead later this year. The company has spent pounds 500m on its cable television and telephone systems and the total investment is expected to rise to pounds 1.25bn.

Telewest had appointed Kleinwort Benson and Goldman Sachs to pave the way for the flotation. Earlier this year a buoyant stock market encouraged a flurry of new issues but recent corrections, which have led to fears of a full- scale collapse, have raised doubts about a number of planned issues.

One of Telewest's advisers said that the issue was not a lack of confidence in the cable television industry but worry about the state of the markets. There was no pressure on Telewest from its parent companies to seek a listing now.

Last month the Independent on Sunday reported that Telewest was having second thoughts about its flotation, but at that stage the company and its advisers appeared determined to press ahead with the pre-marketing.