Liberty Media face lawsuit from Telewest bondholders

Billionaire US businessmen John Malone's Liberty Media Group is facing a legal challenge in its quest to gain control of Telewest bonds.
A lawsuit has been filed in a New York court by disaffected bondholders who claim Liberty Media's bonds offer was "illegal".
The bondholders' group allege that Liberty gained advantage from information supplied by their three directors of the Telewest board when making the bonds offer. The group contend that the bond offer should be withdrawn on that basis. Liberty, which holds three seats on the Telewest board by virtue of their 20% ownership of the troubled cable company's shares, deny the charges.
Liberty have responded to the suit by extending the bond offer deadline to July 19 in order for interested parties to consider this latest development. The company added that anyone willing to do so, can withdraw their acceptance before that deadline.
In a statement, Liberty Media said: "The expiration date for the offer has been extended and withdrawal rights have been reinstated to permit the holders of Telewest notes and debentures to have adequate time to review the supplement and evaluate for themselves the merits of the offer in light of the allegations made in the lawsuit."
Liberty have received acceptances to the value of 17% of non-convertible bonds. It is understood the company is looking to secure 25% of bonds – the threshold required for Liberty to veto any restructuring proposals – before the offer runs through next week.
Liberty instigated their drive to secure bonds so as to strengthen their position should a debt-for-equity swap occur at Telewest. In the long term, Malone could gain a decisive role in any merger between Telewest and NTL.
Currently, Telewest, the UK's second-largest cable provider, is straining under the burden of £5.3 billion. NTL's position is more precarious as it languishes in Chapter 11 insolvency and $17.5 billion of debt.
Barclay Knapp was recently confirmed by bondholders at NTL as the man to lead the company from insolvency.
Telewest, www.telewest.co.uk
Liberty Media, www.libertymedia.com
(GMcG)