Telewest refinancing 'near' as subscribers keep quitting

Telewest managing director Charles Burdick insisted yesterday that the cable operator was "close" to finalising its financial restructuring, after overcoming a last-minute hitch to the protracted overhaul of its balance sheet.

Reporting reduced losses of £208m for the six months to June 30, Mr Burdick said Telewest would focus on returning to growth in the second half by introducing new bundles, offers and high profile marketing campaigns.

The company was close to a deal with creditors that would have seen £3.5bn wiped from its £5.3bn debt, but bondholders demanded a greater slice of the equity in exchange for forgoing their debts at the end of last month.

Telewest agreed this week to give shareholders 1.5% of the company's shares, instead of the 3% offered under the original plan. Customers fell by 24,000 during the first half to a total of 1.7m but the number of subscribers who do not renew their deal was cut to a low of 16%.

The churn figure is still high compared with pay-TV rival BSkyB but an improvement on the days when the cable industry was reviled for poor customer service and more than one in four customers cancelled subscriptions.

Total turnover, including content division Flextech and BBC joint venture UKTV, remained flat on the same period last year at £674m, with the pre-tax loss narrowing from £239m to £208m. Average revenue per user hit a record high at £43.61 in the second quarter.

Sales were up by about 30% in July on the previous month after the company gave away a basic television package with each telephone connection and introduced a cut-price £10 installation offer.

Mr Burdick said the company's focus would remain on increasing the number of high speed broadband customers and persuading them to become "triple play" subscribers who sign up for internet, pay-TV and telephone services.

Revenues at the broadband division rose 62% on the same period last year to £55m. Telewest added 30,000 subscribers in the second quarter, taking its broadband customer base to 329,000.