NTL seeking to renegotiate debt

NTL is seeking to renegotiate a vital $500 million (€515 million) debt facility in a move that is expected to delay the cable group's emergence from Chapter 11 bankruptcy protection until at least next month.

NTL, which has reached initial agreement for a $10.6 billiodebt-for-equity swap, needs the facility to fund working capital when it emerges from protection from its creditors.

However, increasing volatility in the US cable sector has made negotiating the facility difficult, said people close to the company.

NTL said it was "in the process of finalising" the exit facility and "paperwork" had prevented the group from emerging out of bankruptcy this month.

However, one person close to NTL's bondholders said "complications" in the British group's restructuring emerged because of difficulties experienced by its peers.

The collapse of Adelphia Communications and questions surrounding how cable groups account for subscribers have caused a sharp drop in the United States bond market for cable groups.

NTL had agreed to pay lenders an exit loan that was 400 basis points above the benchmark US high-yield cable bond - financing that has proved to be too expensive following the fluctuation in the market.

"The groups have reached agreement in principle, but every day that passes, there are changes.

It isn't that they cannot agree but when will they put the signatures to it?" the person said.

Concerns about the group's restructuring emerged even as the position of Mr Barclay Knapp, NTL's chief executive, was solidified.

The dealmaker will be paid $2.1 million in severance if he is fired before the end of next year, according to documents filed in connection with NTL's insolvency. - (Financial Times Service)