Huff and puff

10 June 2003

At the last minute, uppity creditors of cable group Telewest have demanded a rejig of its restructuring plan, and of its management. It looks like bondholder Bill Huff, who played the same game at rival NTL, is set to redraw the map of UK cable.

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Telewest's capital restructuring has been derailed in its final stages by the intervention of some of its bondholders. The UK cable firm says that its Bondholder Committee, at the request of some of its members, has asked for changes to the economic and other terms of the preliminary agreement it reached with its creditors in September 2002. According to newspaper reports, the objecting bondholders are led by Bill Huff, the US hedge fund investor. Huff is the largest shareholder in rival cable company NTL following its restructuring, which concluded in January.

It has also been reported that Cob Stenham, Telewest's chairman, is to stand down after the restructuring, and that bondholders want to see the departure of its chief executive Charles Burdick.

Telewest's preliminary restructuring agreement would have exchanged bondholders' £3.5bn claim on the company for 97% of its equity. The company has a net £1.6bn of senior debt, which would be unimpaired under the proposals. Its main shareholders, with about quarter of the shares each, are Liberty Media, the US cable firm, and IDT, a US telecoms firm. IDT bought its 23% stake from Microsoft in May for $5m. Microsoft paid $2.6bn for it in 2000.

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