News

Battered NTL Says It'll Meet Guidance

12/23/2001 7:00 PM Eastern

Rocked by investors' fears that it won't be able to pay off its debt, beleaguered NTLInc. — the New York-based provider of cable and telephony service in the United Kingdom — received a slight lift last week, after it said it would meet or exceed cash-flow guidance for the fourth quarter and year-end.

NTL shares, which have fallen by 92 percent over the past six months, rose 13 cents each to 85 cents on Dec. 18, the day of the announcement. But despite the good news, the company also said negotiations to sell its transmission-tower business, although still ongoing, would be delayed.

The MSO first announced it would sell the tower business in July. It said it would use the proceeds of the sale to help pay down its $17 billion in debt. At the time, the unit was expected to fetch about $2 billion.

While NTL had expected to wrap up the rumored sale to France Telecom S.A. by the end of the year, several European press reports said negotiations had hit a snag. According to reports in the Financial Times
earlier this month, France Telecom was rumored to be holding out for a lower price.

Though NTL said it's in negotiations with "several interested third parties," the company admitted it would not be able to finalize a deal as early as expected.

"We had hoped to announce details of the Broadcast transaction and the strategic options we are considering in Continental Europe by the end of this year," NTL CEO Barclay Knapp said in a prepared statement. "Unfortunately, this is not the case, but our new plans allow us to continue to approach these alternatives with the goal of maximizing shareholder value."

Although the asset sales appear to be in limbo for the moment, NTL tried to ease the fears of its investors — concerns that were compounded when the two largest rating agencies recently revised the company's credit rating.

Standard & Poor's and Moody's Investors Service both lowered their ratings on NTL debt in the past two months, each citing concerns about the company's liquidity position.

NTL stock dipped below $1 per share on Dec. 10. The stock, which had traded as high as $139.39 in January 2000, closed at 91 cents per share on Dec. 19.

NTL reiterated its fourth quarter and year-end cash flow guidance and stressed that it has no immediate liquidity concerns. The company said its management is developing a new business plan that will result in incremental positive cash flow compared with its previous 2002 guidance, and plans to reveal details of that strategy at a conference in 2002.

Previously, NTL estimated 2001 cash flow of $703.4 million (485 million pounds), rising to $1.4 billion (950 million pounds) in 2002 and $2.3 billion (1.575 billion pounds) in 2003.

September