Cable operator Telewest
Telewest, which owns travel agent tool Endeavour and Rapid Travel Solutions, is to merge its consumer and business divisions and axe 1,500 staff, in order to cut costs by around £50m a year.
However, as the company has debts of £5.3billion further changes will also have to be made. There are increasing calls for a debt-for-equity swap, which would leave bondholders owning most of the company.
Telewest`s massive amount of debt meant that despite releasing good results for the first three months of the year, Telewest`s share price did not improve. On Friday morning Telewest shares were trading at 10 pence, compared to highs over £5 in 2000.
Core profits for the first three months of 2002 rose 34% to £91m, compared with £68m in the same period last year. Sales grew 4% to £334m, although this was due to revenue from domestic customers which was up by 11%. In contrast revenue from business customers was down by 6%.
Adam Singer, Group chief executive commented that the results marked the `seventh straight quarter of good operating results?f despite the weak telecoms and advertising market.
Finance officer, Charles Burdock stated that “even in the worst case scenario the company had enough cash to last fifteen months”.