NTL, the UK's largest cable network operator, is expected this week to announce that it has reached terms with banks and major shareholders for a recapitalisation and rescheduling of its $17.2bn debt.
The company, which is US registered, is then likely to apply for 90-days of Chapter 11 court protection from other creditors and emerge in a position to service its debts and to continue to grow in the potentially lucrative UK market.
On Friday John Malone's Liberty Media announced that it was no longer trying to buy a strategic stake in the business. The move should make it simpler for the bankers and bondholders to push through proposed deal.
Under the terms of the recapitalisation bondholders will convert some $8.55bn (£6bn) of corporate debt into shares, diluting existing shareholders interests by 97%. The bondholders will become the new owners of the company, pushing aside Cable & Wireless and the largest shareholder France Telecom. The bondholders will also provide some $715m (£500m) of fresh cash to fund development of the business.
Despite the huge losses being suffered by the current owners, the deal is being hailed as a near miracle in corporate finance circles. Not only were the major interests able to agree that there was still a business worth keeping going despite this being the UK's biggest ever corporate refinancing, they reached accord inside ten weeks (Screendaily Jan 31) when many had forecast negotiations to continue until the end of the year. And Barclay Knapp, the controversial chief executive, gets to keep his job.