Yesterday Microsoft announced it is proposing the sale of its share in the struggling, debt-ridden UK cable company Telewest. Microsoft has a 24% stake in the firm and has been seen as an important investor in the company which, as with the other major UK cable company NTL, has been slowly falling deeper into debt.
The US cable empire Liberty Media is the firm that is likely to take up the offer, and they have said in the past that they are "trolling" for cable companies in Europe to invest in. Liberty already have a 25% stake in the company and they are in discussions to take control of Telewest.
This move follows Microsoft's withdrawal of three directors representing them on the Telewest board after catastrophic losses of billions earlier this year in their cable investments across Europe. To try and remedy the problem Telewest have been laying off staff and trying to invest carefully since the reality of their financial losses was realised.
Microsoft expects the sale of their share in the company to happen in the next 30 days if the deal is agreed. The sale is valued at $300 million, based on the current share price. The changing finances of Telewest show the climate in the UK cable market, even in areas where cable is available people have been slow to adopt it and the massive costs of maintaining the infrastructure and developing cable networks is now taking its toll.
News source: Reuters
-1 Comments - Add comment