Speculation mounts over NTL sale

CABLE TV operator NTL remained tight-lipped yesterday as speculation mounted it was planning to sell its Irish operation for up to €200 million.

The British cable giant, which snapped up the state-owned Cablelink in 1999 for €680m before filing for bankruptcy refused to comment on reports that it had hired a major investment bank to oversee the sale.

The company's finances remain under considerable pressure, with a debt burden of over €4.5 billion. This acts as a drain on cash, with yearly interest payments of approximately €300 million needed to service the debt. The sale of NTL Ireland would help cut this debt.

A group of unidentified Irish investors and an international media company are believed to be among those circling the Irish operation.

Any buyer would take control for a knock-down price when compared with the amount handed over in 1999, which coincided with the dotcom boom that inflated the value of technology companies.

But they would face the unattractive task of playing catch-up in investing in NTL's network, which was delayed by the parent company's cashflow problems.

NTL Ireland serves almost 350,000 customers in Dublin, Galway and Waterford and employs 500 people. Its main focus has been on providing basic piped TV signals but it recently moved into quality digital TV services rivalling fellow British operator Sky and now has 88,000 digital customers.

Industry observers consider digital TV a key market because it has greater potential for growth than the older analogue-based service and encourages subscribers to pay for a broader range of film and sports channels.

NTL also announced plans last year to target the potentially lucrative broadband high-speed internet market, rolling out broadband availability using its cable network over three years.

The proposed deal comes just a month after French media group UGC bought Chorus, the former Irish multichannel company, for almost €50 million.