Debt-ridden cable telco NTL has struck a rescue deal with its main creditors to save it from folding in the biggest debt write-off in history — good news for concerned customers.
£7bn? I'll just look down the back of the sofa…
The company, which is the biggest broadband services provider in the UK, with 1.2 million customers, said it would be investing heavily in broadband services. Until recently one of the reasons the UK cable firms had not expanded the customer base for their comparatively cut-price broadband was their debt.
"We feel [broadband] is where our future lies," added a company spokesman. "This is what we'll be focusing on."
If this deal does go through it could provide a ray of light for other service providers which are in the red, including Telewest, which carries around £5bn of debt.
NTL will file for US Chapter 11 bankruptcy, which offers a company protection from creditors while restructuring. This will allow the company to rid itself of around £6.9bn of its £11.7bn debt mountain.
Although the banks have not yet approved the deal, NTL is positive about the outcome of yesterday's meeting, due to backing from its main creditors, which hold around £7.4bn worth of company bonds.
A decision from NTL's banks is expected by the end of the month.
NTL will be split into two companies, a healthier UK and Ireland unit and a more beleaguered European firm, NTL Euroco.
"There are no plans for job losses, but we don’t really have any details of how this will pan out," said an NTL spokeswoman.
But if the company wants to survive, it may need to address its customer services situation.
NTL already has two so-called 'hate sites' dedicated to it, NTLhell.co.uk and NTHellworld.com, which have garnered thousands of hits. PC Advisor readers have also complained about maintenance services on our Consumerwatch forum.
However, the company cleverly purchased NTHellworld last week, as a way, it claims, of improving customer services and attaining feedback. Of course, the move also allows the firm to vet complaints.
"NTHellworld is a forum website made successful by NTL's customers and NTHellworld moderators, and has allowed our customers to say what they feel about us. We have no intention of closing down the site or silencing it," said Tim Ryan, head of PR at NTL UK, in a statement.
NTL reiterated no staff cuts would be made, but could not confirm what, if any, improvements it will be making to its customer service facilities.