Struggling U.K. operator NTL Inc. said it is negotiating with bank lenders and bondholders regarding more than half of its $17 billion debt, but warned that it may run out of cash before the restructuring is complete.
In a conference call with analysts, NTL president Barclay Knapp said the negotiations were ongoing, but declined to provide further details.
There were "uncertainties with respect to this process," Knapp added, such as NTL's ability to maintain adequate liquidity to complete the restructuring and its ability to obtain the agreement of creditors.
"Our goals remain the same, to significantly reduce our indebtedness while maintaining control," Knapp said during the conference call. "We will exit [negotiations] with a clean, low-leveraged balance sheet. We want to permanently remove the 'debt-laden' adjective that precedes the NTL name."
NTL is the largest cable operator in the U.K., with about 3 million subscribers.
Knapp's goal of maintaining control while reducing debt appears to contradict some published reports that said bondholders were negotiating to convert about $11 billion in NTL debt into 100 percent equity in the company.
While Knapp appeared to be encouraged by the pace of the negotiations — he said they were on schedule — the lack of an agreement would force auditors to include a "going concern" letter in NTL's year-end financial report, Knapp added.
NTL has been under fire for months as it has tried to pare down its more than $17 billion in debt. The company has undergone a massive cost-cutting initiative — it laid off 6,500 workers last year — and has reportedly been seeking out equity investors.
According to published reports, NTL executives have met with executives at Liberty Media Corp., the Denver-based programming giant that also owns 25 percent of NTL rival Telewest PLC. Liberty has acknowledged that it's talked with NTL, but has declined further comment.
Also rumored to be interested in an equity stake in NTL is AOL Time Warner Inc., which also has European broadband investments.
The debt problems have overshadowed what was a relatively good year for NTL. The company managed to reach its revenue and cash-flow targets despite pressures to restructure its debt.
New services helped to fuel growth. Digital-cable subscribers were up by about 110,000 customers, to 1.25 million at the end of the period.
NTL had 118,000 cable-modem customers, up by 40,000.