Telewest may still merge with NTL in 2004

LONDON - The UK's two struggling cable firms NTL and Telewest may still merge in early 2004.

Telewest managing director Charles Burdick, while speaking about the firm's improved prospects, said a merger with NTL could happen in the beginning of 2004.

NTL has declined to respond on the comments. However, in the past both companies have talked about a merger being a logical move, but little concrete steps have ever been taken. There is little overlap and industry analysts believe there would be few regulatory hurdles.

Both companies have been hard hit and saddled with huge debts incurred as the result of infrastructure investment. Telewest has recently axed a further 1,000 jobs and cut spending.

NTL has gone through a £6.7bn debt-for-equity swap with bondholders to help reduce its £12bn debt mountain. Telewest has also been negotiating with bondholders about a £3.6bn debt-for-equity swap to help reduce its £5bn debt as part of its restructure.

Telewest also lost its CEO Adam Singer, and Jane Lighting, the head of its content arm Flextech, was last week confirmed as the new chief executive of Five.

Burdick, who took over the running of the company after Singer left, has been charged with the task of ensuring the company breaks even once the debt restructuring takes place.

Burdick told Dow Jones that the debt restructuring should be completed in the second quarter, leaving the company free to focus on performance and on combining its operations with NTL.

"Our plans show the second quarter of 2004 cash-flow positive, but I have the team focused on internal targets that move that up to the fourth quarter of 2003," he said.

In last two quarters, Telewest has seen subscribers fall by a total of 25,000, but it has signed up about 250,000 broadband subscribers by November, and new subscribers are signing up at a rate of around 50,000 a quarter, according to Burdick.

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