Banks want NTL bosses to quit

CHANGES at the top of struggling cable company NTL seem inevitable. It has now emerged that a group of senior bankers recently approached several outsiders to become NTL chairman, which would have ousted George Blumenthal.

This would also have sidelined chief executive Barclay Knapp, who is facing growing pressure to take the fall for NTL's £12bn debt crisis. But the banks appear to have stayed their hand for the moment, giving the NTL team a new lease of life.

Senior lenders have considerable clout as their debts would be covered by NTL's assets - in contrast to other lenders and bondholders down the queue. But there are attempts to find a compromise between all creditors.

After expanding in Europe too quickly, NTL is losing as much as £9m a day. Analysts fear it could run out of cash as early as June if it does not get relief from its debt burden.

Although it has cut 2,000 jobs and frozen managers' pay, it has called in Credit Suisse First Boston to assist a rescue. Options include converting debt into equity and finding a new investor, but neither bode well for Knapp.

'He was wildly over-optimistic,' said one UK fund manager, who added that investors will want a new face at the helm to give the message that NTL has turned over a new leaf. NTL and France Telecom, which owns 18%, have been in talks with potential investors such as Liberty Media, Microsoft and AOL Time Warner.

Knapp hoped to build a network of cable TV companies that would always have the best technology and programmes because costs would be spread across a large customer base. But investors have grown sceptical that it will ever turn a profit. NTL has said it will cover its interest payments by first quarter 2003. It will shortly provide further details of cost cuts and its expectations for future profits.