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Cable TV firm NTL files for bankruptcy.

Cable TV firm NTL, which has a number of customers in the Midlands, yesterday filed for Chapter 11 bankruptcy protection in one of the largest actions of its kind in the US.

NTL listed pounds 12 billion of total assets and pounds 16.7 billion of total debts in its filing for reorganisation under Chapter 11 of the US bankruptcy code.

The group, whose operations are in Europe but which is based in New York, last month reached agreement with a majority of its bondholders to swap pounds 7.57 billion of its crippling pounds 12.1 billion debt mountain into a controlling equity stake. The company's lending banks approved the restructuring last week.

NTL, the larger of the the UK's two loss-making cable companies with 2.8 million subscribers, ran up huge debts through a buying binge in the 1990s technology boom. The resulting interest payments have threatened what analysts consider a viable business The debt-for-equity swap is the functional equivalent of a pounds 7.5 billion corporate bond default, which tops that of bankrupt energy trader Enron. Only seven public companies have had larger US bankruptcies.

NTL has said its largest shareholder, France Telecom, and others have backed the plan. Some, however, have challenged the plan in US courts, alleging that management misled them.

The company is to be split into its core British and Irish operations and Euroco, including non-core continental European assets such as Cablecom, which it failed to sell last year. Bondholders will own the core British and Irish businesses and 86.5 per cent of Euroco.
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Title Annotation:Business
Publication:The Birmingham Post (England)
Geographic Code:9CHIN
Date:May 9, 2002
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