Telewest to offer 98.5% of common shares for notes

By Jeff Pines

Washington, April 8 - Telewest Communications plc wants to offer 98.5% of the common stock in a new holding company in exchange for the cancellation of all of the notes that the company and Telewest Finance Ltd. sold and for certain other claims. Eligible shareholders would get 1.5% of the new shares, it said in an April 8 filing with the Securities and Exchange Commission.

The new holding company for Telewest's businesses would be called Telewest Global, Inc. It will be incorporated in Delaware and try to list the shares on the Nasdaq National Market.

Telewest said it had reached an agreement with key bondholders, major shareholders and its senior lenders.

The London-based broadband communications company got into trouble after taking on a large amount of debt to build its cable network and acquire smaller companies; the company said its debt load is "not now sustainable."

Without a restructuring, the company will have to file for some form of bankruptcy, it said.

The plans, one for Telewest and another for Telewest Finance, require approval from 75% by value of the creditors.

An amended senior secured credit facility will provide TCN as borrower with £2.03 billion of which £125 million is in uncommitted facilities.

Depending on TCN's total senior debt to consolidated annualized TCN Group net operating cash flow, tranche A term credit facilities of £1.695 billion will bear interest at Libor plus 250 basis points to 400 basis points plus any required regulatory fees. Tranche A matures on Dec. 31, 2005.

Tranche B, a £140 million revolver, will bear interest at Libor plus 400 basis points to 550 basis points depending upon the ratio plus any required regulatory fees. Tranche B matures on Dec. 31, 2005.

Tranche C, £50 million in overdraft facilities, will bear interest at 250 basis points to 400 basis points. It matures on Dec. 31, 2005.

Tranche D term credit facilities of £145 million are at Libor plus 500 basis points and any required regulatory fees. Tranche D matures on June 30, 2006.

The whole facility will have a 40 basis point fee payable when the company enters into the commitment.

Telewest plans to ask the English High Court in April for permission to hold meetings with claimsholders. Telewest Finance plans to ask the court for permission on April 23.

Voting on the restructuring plan is expected to take place on June 1.

A May 3 hearing in a U.S. bankruptcy court is tentatively planned.

Telewest plans to seek English High Court approval during the week of June 14.

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