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Monday, 16 July, 2001, 17:24 GMT 18:24 UK
UPC shares collapse
A UPC studio
UPC is burdened with debt, causing investors to worry
Shares in United Pan-Europe Communications (UPC), Europe's biggest cable TV company, crumbled to a new record low as investors lost confidence in its ability to raise new financing.

UPC shares fell by 37% to close at 0.95 euros, their lowest level ever, on more than three times their usual daily trading volume.

A company spokesman said the firm knew of no specific reason for its shares to fall, and that it had 1.5bn euros (912m; $1.3bn), enough to last until 2003.

The firm has repeatedly denied rumours that it is on the verge of running out of cash.

UPC had 7.2bn euros of net debt by the end of the first quarter.

Speculation

One possible reason is the fear that UPC could lose its listing on the New York Nasdaq exchange.

UPC dishes
The European cable business is suffering

If a stock trades below one dollar for 30 consecutive days it would be given a warning and after another 90-day period it could be delisted.

Another explanation was that investors were shifting their UPC holdings into bonds: if the company is forced into bankruptcy, bondholders have priority over shareholders.

UPC's price collapse hit the shares of other firms in the European cable industry, including Energis, Cable & Wireless and Telewest, in which UPC is a shareholder.

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See also:

09 Jul 01 | Business
Cable giant bids for AT&T Broadband
26 Jun 00 | Business
UPC buys into Telewest
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