Telewest shares hit new low

Shares in UK cable company Telewest have fallen to an all-time low, with concern among investors that it may follow rival NTL in handing control of the business to its creditors.

Telewest has debts of almost £5bn, and lost £2bn in 2001 after writing down the cost of an acquisition it made two years ago.

Shares fell 10.45% on Monday, hitting a new low of 9.75p.

NTL, the other major UK cable company, is believed to be on the verge of agreeing a deal which would give bondholders a stake of at least 95% in the company to allow it to escape liquidation.

Rescue plan

On 1 April, bondholders agreed to allow NTL to withhold $95m (£66m) in interest to give the company more time to come up with a rescue plan.

Telewest said last month that it would not need to restructure its debt as long as it hit financial targets, but was discussing a number of options.

Analysts believe a successful restructuring by NTL would encourage Telewest to follow suit.

Telewest provides television, telephone and internet access to private homes, and says that its bundle of services is attracting more and more customers.

It has said it has seen "excellent" growth in demand for its high-speed broadband internet services.

Under threat

Telewest and NTL both face stiff competition from pay TV companies and telecommunications firms such as BSkyB and BT.

There has been speculation that the two companies, which operate in different franchise areas, could merge.

NTL is expected to miss an interest payment due next week on bonds issued by US subsidiary NTL Communications, which are not seen as crucial by bondholders.