NTL boss tackles £12m debt

Simon Fluendy12 April 2012

NTL boss Barclay Knapp is to quit running US telecoms company CoreCommunications to head off criticism of his dual role and concentrate on resolving the cash-strapped UK cable giant's problems.

The group is also returning a leased G4 Gulfstream jet in a bid to cut costs. Knapp told Financial Mail: 'We'll get the remaining time refunded as cash.' He made 28

round trips last year between New York, where NTL is listed, and the company's headquarters in Hook, Hampshire.

The latest moves come as US investment bank CSFB begins restructuring NTL's £12 billion debt. Credit rating agency Moody's last week added to the group's financial woes by downgrading NTL's debt rating to junk bond status.

Knapp came under pressure to leave CoreComm after revelations by Financial Mail that NTL paid the long-distance phone operator £10 million last spring as part of a rescue package.

Corporate governance experts in America said that holding the job of chief executive at two companies meant shareholders of both groups were being short-changed.

Knapp said: 'CoreComm was the vehicle that George Blumenthal, NTL's chairman, and I used to fund the first UK cable acquisitions - in effect NTL was derived from it. Now I am stepping down as chief executive and becoming non-executive chairman while George will step down as chairman to become a non-executive director.'

Despite Knapp taking firmer control over NTL's restructuring, its future remains in doubt. He admitted: 'The bonds have gone from 100% of face value to 30% and the shares have crashed too. The past few months have been dramatic and depressing.'

City sources say CSFB is hoping to persuade bondholders to swap their debt for new shares, allowing NTL to cut an interest bill of almost £1 billion a year.

NTL, which has 3.3 million UK customers, may then seek a new equity partner, such as John Malone's Liberty media, Microsoft or AOLTime Warner. This would be a likely prelude to a merger with rival UK cable group Telewest.

Knapp insisted: 'We are already making progress restructuring NTL.'

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in