Telewest's bondholders demand hearing on debt restructure plan

A group of bondholders in Telewest yesterday called on both the troubled cable firm and one of its shareholders, Liberty Media, to listen to its debt restructuring proposals.

The group, which represents a majority of Telewest's bondholders, said it had approached the company's board concerning a debt restructuring.

"The committee will wish to discuss urgently with Liberty Media Corporation and Telewest the committee's own proposals for a restructuring of Telewest's publicly issued bonds," it said in a statement.

The move comes just days after Liberty Media, which owns a 25 per cent stake in Telewest, unveiled plans to launch a tender offer for 20 per cent of the bonds in Telewest.

But the bondholder group said yesterday it was sceptical that the "consummation of the presently proposed tender offer will facilitate a restructuring or other resolution of Telewest's debt problems in the best interests of bondholders as a whole".

Liberty is making the offer in an attempt to protect its interest in the UK operator as speculation mounts that Telewest, which has about £5.3bn of debt, will be forced to carry out a debt-for-equity swap. A restructuring of that nature would see bondholders seize control of the company.

Telewest's rival, NTL, recently filed for Chapter 11 bankruptcy protection in the US as part of a rescue package that will see its bondholders seize control of the business by converting about $10.6bn (£7.2bn) of debt into equity.

A Telewest spokesperson refused to comment other than to say the company had many "stakeholders" and was "always happy" to talk to them.

At the company's annual general meeting last week, Telewest's chief executive, Adam Singer, admitted that a debt-for-equity swap was on the cards. "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, adding: "I cannot promise you today that such an event [a debt-for-equity swap] will not take place."

Once NTL and Telewest have carried out their respective balance sheet restructurings, the pair are expected to merge their operations.