NTL adds to pay-TV blues

CABLE firm NTL is poised to write-down billions of pounds in investments, adding to the gloom surrounding Britain's pay-TV industry. The business, which is buckling under £12bn of debt, embarked on a spending spree during the telecoms boom as well as investing heavily in its own network.

It bought a clutch of European cable businesses, broadcasting transmission towers and even stakes in football clubs (it still sponsors Newcastle United). But the assets and acquired businesses are now worth just a fraction of what the group paid for them.

On Wednesday, NTL's chief executive Barclay Knapp will reveal pre-tax losses of about £2.5bn for 2001. But this is before several billion pounds in write-downs, which will push the group even deeper into the red. There will also be redundancy costs for the 6,000 jobs axed in 2001.

Knapp has publicly apologised for the group's woes, and will try to highlight an increase in underlying profits. Last year's earnings before interest, tax, depreciation and amortisation have beaten NTL's guidance of £485m. But this will offer little comfort to investors, whose shares have slumped from a high of $40 (£28) to 20 cents (14p).

Knapp is already talking to bankers about a debt-for- equity swap which Merrill Lynch reckons could leave shareholders with less than 5% of the company. Cable rival Telewest, which owes £5.1bn, is also in trouble. City bankers are braced for a debt for equity restructuring.

Meanwhile, Granada and Carlton will discuss whether to put their ITV Digital pay-TV venture into administration at a board meeting today. They have made little progress with attempts to persuade the Football League to accept a lower price for broadcast rights. The League is threatening to ask football fans to boycott ITV programmes such as Blind Date. This all leaves satellite broadcaster BSkyB sitting pretty.