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Tuesday, 30 April, 2002, 05:54 GMT 06:54 UK
NTL seeks 11th hour bank support
ntl graphic
NTL's spending on building its network drove it deep into debt
Troubled cable company NTL is in 11th-hour talks with banks to keep a $10.6bn (7.3bn) rescue deal on track, a report has said.

NTL, the UK's largest cable firm, two weeks ago agreed an outline deal with bondholders which would see their debt swapped for shares in the company.

NTL is now attempting to negotiate a deal with banks deemed satisfactory to bondholders.

The firm has been struggling under the weight of more than $17bn in debt, amassed as it rushed to take over rivals in the UK and elsewhere and build its network through the late 1980s and 1990s.

Bankruptcy threat

A 30-day interest "grace" period granted by bondholders expires on Tuesday.

Failure to ease bondholder concerns could see them demand interest payments, forcing the company to file for bankruptcy, the Financial Times said.

"Bondholders will act to protect value in the company," a source told the newspaper.

"If they think a deal with banks is not forthcoming or the banks are not acting in NTL's best interest, they will call for it to file."

While NTL has long seen so-called Chapter 11 bankruptcy as a part of its revival plan, an early filing could leave the firm without the time to complete its revamp strategy.

Insiders were on Monday confident the bank would win bank support, the FT said.

Deal details

The deal agreed with bondholders two weeks ago would see NTL split into a UK and Ireland operation, and a company to take over the European activities.

Through swapping debt for shares, the deal would effectively allow $800m a year in savings on interest payments - as well as providing about $500m in new finance, the company said.

Bank debts will be untouched.

Existing owners - which include a stake held by France Telecom - would have the right to buy shares as part of a $10.5bn rights issue, which would potentially give them up to 32.5% of NTL UK and Ireland.

See also:

16 Apr 02 | Business
NTL strikes deal with creditors
15 Apr 02 | Business
Telewest shares hit new low
08 Apr 02 | Business
NTL 'close to debt deal'
03 Apr 02 | Business
Hard-bitten NTL struggles to survive
01 Apr 02 | Business
Bondholders give NTL breathing space
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