SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): January 10, 2003
NTL INCORPORATED
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(Exact Name of Registrant as Specified in Charter)
Delaware 001-22616 52-1822078
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(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
110 East 59th Street, New York, New York 10022
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 906-8440
NTL COMMUNICATIONS CORP.
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
Background of Restructuring and Recapitalization
On January 10, 2003 (the "Effective Date"), the Second Amended Joint
Reorganization Plan of NTL Incorporated and Certain Subsidiaries, dated July
15, 2002 and confirmed on September 5, 2002, and as modified from to time (the
"Plan") became effective.
Pursuant to the Plan, NTL Incorporated ("Old NTL Inc.") and its debtor
subsidiaries (collectively, the "Debtors") and non-debtor subsidiaries
(collectively, "Old NTL") were reorganized into two separate groups, the
holding companies for which are the corporations previously named "NTL
Communications Corp." and "NTL Incorporated." The corporation formerly known
as NTL Communications Corp. was renamed "NTL Incorporated" (referred to herein
as the "Company" and together with its subsidiaries, "New NTL") and is the
holding company for Old NTL's broadband communications operations in the UK
and the Republic of Ireland. The corporation formerly known as NTL
Incorporated was renamed "NTL Europe, Inc." (referred to herein as "NTL
Europe, Inc.") and is the holding company for substantially all of Old NTL's
businesses and investments in continental Europe as well as other minority
investments and interests.
On the Effective Date, the Company filed the Amended and Restated
Certificate of Incorporation of NTL Communications Corp. with the Secretary of
State of the State of Delaware, authorizing, among other things, the change in
the Company's name to NTL Incorporated. In addition, on the Effective Date and
pursuant to the Plan all previously outstanding public debt and equity
securities of the Company were cancelled and the Company issued (a) 50,000,000
shares of its common stock, par value $0.01 per share, together with
associated preferred stock purchase rights (the "Common Stock"), and (b)
warrants to purchase 8,750,000 shares (subject to adjustment) of Common Stock
at an exercise price of $309.88 per share (subject to adjustment) (the "Series
A Warrants").
The Company also issued 496 shares of Common Stock and 496 Series A
Warrants subscribed for in the Equity Rights Offering and 473 shares of Common
Stock subscribed for in the Noteholder Election Option. After expenses, it is
expected that there will be no net proceeds from such offerings.
The Company will reserve (a) 8,750,496 shares (subject to adjustment) of
Common Stock for issuance upon exercise of the Series A Warrants and (b)
5,000,000 shares (subject to adjustment) of Common Stock for issuance upon
exercise of the management incentive options authorized for grant under the
Company's management incentive plan.
A description of the capital stock of the Company and other related
matters is contained in its registration statement on Form 8-A filed with the
SEC on January 10, 2003, which is incorporated by reference herein,
registering the Common Stock, the Series A Warrants and the
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Series A Junior Participating Preferred Stock, par value $0.01 per share, of
the Company, pursuant to Section 12(g) of the Securities Exchange Act of 1934,
as amended.
Pursuant to Article VII.B.1 of the Plan, any holder of allowed claims or
interests entitled to receive a distribution under the Plan who, as a result
of such holdings, would own in excess of 15% of the outstanding Common Stock
upon consummation of the Plan is only entitled to receive distributions in an
amount not to exceed 15% of the outstanding shares of Common Stock. However,
any such holder may be designated by the Company and the Creditors' Committee
as a "New NTL Grandfathered Distributee" in order to receive the full
distributions of Common Stock and Series A Warrants to which it would be
entitled but for Article VII.B.1 of the Plan. France Telecom has been
designated a New NTL Grandfathered Distributee, and therefore will receive the
full distribution of Series A Warrants to which it is entitled on account of
its allowed claims and interests under the Plan.
Summary Description of New NTL's Business
In the UK, New NTL provides a broad range of communication services,
including: (1) ntl: home, delivering broadband services to residential markets
comprising residential telephone, analog and digital cable television,
narrowband and broadband Internet access, and interactive services; (2) ntl:
business, delivering broadband services to business markets, comprising
business telecommunications and narrowband and broadband Internet services;
(3) ntl: broadcast, delivering digital and analog television and radio
broadcast transmission services, wireless network design, buildout, and
management, tower site rental, satellite and media services, and radio
communication services; and (4) ntl: networks, delivering national and
international carrier telecommunications services and managing the UK national
network infrastructure. In the Republic of Ireland, New NTL provides cable
television services to subscribers in Dublin, Galway and Waterford. In
addition to its communications operations in the UK and the Republic of
Ireland, New NTL has investments in a virtual ISP, VirginNet, a pay-per-view
content provider, Front Row and joint ventures relating to UK digital
television and radio and a calling card business.
Financing Matters
In connection with the Company's emergence from Chapter 11, the Company
and the Guarantors (as defined below) issued 19% Senior Secured Notes due 2010
(the "Notes") in a transaction exempt from the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act"). Initial
purchasers of the Notes also purchased 500,000 shares of Common Stock on the
Effective Date. The gross proceeds from the Notes and such shares totalled
$500,000,000. The aggregate principal amount of the Notes accretes over the
life of the Notes such that the amount repayable at maturity of the Notes (and
in certain other circumstances) will be approximately $558,249,000.
The Notes mature on January 1, 2010, subject in certain instances to
earlier repayment in whole or in part. Interest accrues on the Notes at a rate
of 19% per annum, payable in cash semi-
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annually in arrears on January 1 and July 1, commencing on July 1, 2003.
Alternatively, the Company may elect in respect of the July 1, 2003 interest
payment date to pay interest by the issue of additional pay-in-kind ("PIK")
Notes and may make a similar election for the next two interest payment dates
if cash or cash equivalents falls below a certain level. Any PIK Notes shall
accrete at the same rate as the Notes.
The Notes are guaranteed on a senior basis by the following subsidiaries
of the Company: NTL Digital (US) Inc., CableTel Ventures Limited, Bearsden
Nominees, Inc., CableTel Programming, Inc., NTL International Services, Inc.
and NTL Funding (NJ), Inc. (collectively the "Senior Guarantors"). The Notes
are guaranteed on a subordinated basis by Communications Cable Funding Corp.
(the "Subordinated Guarantor" and together with the Senior Guarantors, the
"Guarantors"). The obligations of the Subordinated Guarantor under the Notes
are subordinated to the Subordinated Guarantor's obligations under the
Company's Working Capital Credit Facility.
The Notes are secured by a lien on and a security interest over (1) all
of the issued and outstanding capital stock held by the Company and the Senior
Guarantors in direct subsidiaries incorporated in the United States and 65% of
the capital stock of direct subsidiaries that are incorporated outside the
United States, (2) substantially all of the assets and properties owned by the
Company and the Senior Guarantors and (3) the capital stock held by NTL Group
Limited in NTL (Triangle) LLC.
The Company may redeem some or all of the Notes at any time at the
redemption prices set out below except that the redemption price shall be at
100% if the Company elects to prepay Notes using the proceeds of a rights
offering prior to the first anniversary of the Effective Date (the "ED
Anniversary"):
Redemption Price
Redemption Date (as percentage of accreted value)
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Effective Date - ED Anniversary 111.0%
ED Anniversary - December 31, 2006 122.0%
January 1, 2007 - December 31, 2007 111.0%
January 1, 2008 - December 31, 2008 105.5%
January 1, 2009 - January 1, 2010 100.0%
If the Company undergoes a Change of Control it must offer to repurchase
the Notes at a purchase price of 101% of the face amount at maturity of the
Notes together with accrued and unpaid interest thereon. For these purposes,
"Change of Control" includes: the adoption of any plan for the liquidation or
dissolution of the Company; the acquisition of beneficial ownership of at
least 30% of the capital stock of the Company; and the current directors (or
other directors approved by them) ceasing to constitute a majority of the
board of directors of the Company.
The indenture governing the Notes imposes operating and financial
restrictions on the
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Company and certain of its subsidiaries. These restrictions affect and in some
cases significantly limit or prohibit (among other things) the ability of
these companies to do the following: make restricted payments, incur
additional indebtedness and issue preferred stock, create liens, pay dividends
on stock or repurchase stock, sell all or substantially all of their assets or
merge with or into other companies or engage in certain transactions with
affiliates. In particular, the indenture governing the Notes provides that
(with certain limited exceptions) the net proceeds of certain asset
dispositions may only be used to repay specified indebtedness, subject to the
ability to reinvest a small amount of the proceeds in capital expenditure.
Except with respect to certain limited categories of permitted indebtedness,
the ability to incur further indebtedness by New NTL is subject to significant
limitations. The indenture governing the Notes also provides that any merger
of the Company with another entity which does not otherwise constitute a
Change of Control must be conditional upon the refinancing of the Notes.
The indenture governing the Notes provides that amendments to its terms
require the consent of a simple majority or, in some cases, 67% of holders of
Notes by face principal amount, except that amendments to negative covenants
or to the terms of certain events of default require the consent of holders of
Notes of at least 80% in face principal amount and, further, amendments to
specified terms of the Notes (mainly: maturity, principal amount, interest,
redemption premium and amendments to events of default with respect to
designated entities) require the consent of all holders of the Notes.
The proceeds from the issuance of the Notes are being used (a) to
consummate the Plan, including, among other things, (1) to repay in full any
claims arising under or as a result of the debtor-in-possession credit
facility provided to Communications Cable Funding Corp, a subsidiary of the
Company, during the reorganization of the Debtors, (2) to purchase the
(pound)90 million aggregate principal amount senior note due 2006, dated as of
April 5, 2002, issued by NTL (UK) Group, Inc. to NTL (Delaware), Inc., plus
accrued interest thereon, and (3) to pay transaction costs related to
consummation of the Plan, and (b) to provide New NTL with working capital.
The indenture governing the Notes and the purchase agreement relating to
the Notes are attached as Exhibits 4.3 and 10.1 hereto, respectively, and are
incorporated by reference herein. The initial purchasers of the Notes are also
entitled to registration rights with respect to the Notes pursuant to the
exchange and registration rights agreement attached as Exhibit 4.2 hereto,
which is incorporated by reference herein. Certain holders of the Common Stock
and Series A Warrants who are or may be deemed to be "affiliates" or
"underwriters" of the Company for purposes of the Securities Act as well as
the initial purchasers of the Notes that received shares of Common Stock have
been granted registration rights with respect to such Common Stock pursuant to
a registration rights agreement, which is attached as Exhibit 4.1 hereto and
is incorporated by reference herein.
Formal approval of the terms of the Company's Senior and Working Capital
Credit Facilities to be restated with effect from the Effective Date has been
obtained from all of the lenders under such credit facilities. The amendments
include modifications to the financial covenants that apply following the
Effective Date to reflect lower anticipated growth and capital
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expenditure. The modifications also incorporate into the amended credit
facilities the Change of Control definitions from the indenture governing the
Notes and impose conditions on the manner in which the net proceeds of asset
dispositions must be applied similar to those included in the indenture
governing the Notes. In addition, the revolving credit facility contained in
the Company's Senior Credit Facility is no longer subject to pre-maturity
reductions in borrowing commitments. In consideration of the agreement to
these amendments, the restructuring fee payable to the lenders under the
Company's Senior and Working Capital Credit Facilities on the Effective Date
was increased to 2% of commitments (1.375% is calculated with respect to
outstanding commitments as at May 2, 2002 and 0.625% is calculated with
respect to outstanding commitments as at January 9, 2003) under the respective
credit facilities.
The restated credit agreement relating to the Company's Senior Credit
Facility is attached as Exhibit 10.2 hereto and is incorporated by reference
herein. The restated credit agreement relating to the Company's Working
Capital Credit Facility is attached as Exhibit 10.3 hereto and is incorporated
by reference herein.
Quotation of the Company's Securities on Nasdaq
On October 7, 2002, the Company received a conditional approval to have
the shares of Common Stock and Series A Warrants quoted on the Nasdaq National
Market upon consummation of the Plan. However, the approval with respect to
the Common Stock is conditioned upon, among other things, the Company's
ability to meet the $5.00 minimum closing bid price requirement of the Nasdaq
National Market with respect to the Common Stock on the first day of trading
on the Nasdaq National Market. There can be no assurance that this requirement
will be met, or that in the future the Company will be able to meet other
continued listing requirements of the Nasdaq National Market. If the Company
fails to achieve the $5.00 minimum closing bid price per share of the Common
Stock on the first day of trading on the Nasdaq National Market but exceeds
the Nasdaq SmallCap Market minimum closing bid price requirement of $4.00 per
share on the first day of trading on the Nasdaq National Market, the Common
Stock and Series A Warrants will be quoted on the Nasdaq SmallCap Market.
Agreements with NTL Europe, Inc.
In connection with the consummation of the Plan, the Company has entered
into several agreements with NTL Europe, Inc. including a Tax Sharing
Agreement, a copy of which is attached as Exhibit 10.4 hereto and is
incorporated by reference herein, a Transitional Services Agreement, a copy of
which is attached as Exhibit 10.5 hereto and is incorporated by reference
herein, a De-Merger Agreement, a copy of which is attached as Exhibit 10.6
hereto and is incorporated by reference herein and a Novation Agreement, a
copy of which is attached as Exhibit 10.7 hereto and is incorporated by
reference herein.
Other Matters
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In connection with the bar date for filing of securities laws claims
against the Debtors pursuant to an order of the United States Bankruptcy Court
for the Southern District of New York located in New York, New York (the
"Bankruptcy Court"), proofs of claim were filed against Old NTL Inc., NTL
(Delaware), Inc. and the Company (formerly named NTL Communications Corp.) by
Morgan Stanley Senior Funding Inc. for $11,400,000. These claims are asserted
by Morgan Stanley Senior Funding Inc. to be in respect of alleged unpaid
financing fees for commitments of capital made in 1999. The Company believes
it has grounds for challenging these claims.
On November 27, 2002, a motion was filed with the Bankruptcy Court
requesting the modification of the Plan to extend the life of the Creditors'
Committee for six months after the Effective Date for the limited and
exclusive purpose of filling any vacancies on the board of directors of the
Company (including that arising from Duncan Lewis' vacation of office). Such
motion was approved by the Bankruptcy Court on December 3, 2002.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
4.1 Registration Rights Agreement, dated as of January 10, 2003, by and
among NTL Incorporated and the other parties listed on the signature pages
thereto
4.2 Exchange and Registration Rights Agreement, dated as of January 9,
2003, by and among NTL Incorporated, the Guarantors listed on the signature
pages thereto and the initial purchasers of the Notes
4.3 Indenture, dated as of January 9, 2003, by and among NTL
Incorporated, the Guarantors listed on the signature pages thereto and U.S.
Bank National Association, as trustee
10.1 Purchase Agreement, dated as of January 9, 2003, by and among NTL
Incorporated, the the Guarantors listed on the signature pages thereto and the
initial purchasers of the Notes
10.2 (pound)2,500,000,000 Credit Agreement originally dated May 30, 2000,
and made among, NTL Communications Limited; NTL Business Limited (which
novated its rights and obligations to NTL Investment Holdings Limited); NTL
Communications Corp.; J.P. Morgan plc (formerly known as Chase Manhattan plc);
Morgan Stanley Dean Witter Bank Limited; J.P. Morgan Europe Limited (formerly
known as Chase Manhattan International Limited) and the lenders party thereto
(as amended, varied, supplemented, novated and restated to date and from time
to time)
10.3 (pound)1,300,000,000 Credit Agreement originally dated May 30, 2000,
and made among, NTL Communications Corp.; NTL (UK) Group, Inc.; NTL
Communications Ltd; J.P. Morgan
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plc (formerly known as Chase Manhattan plc); Morgan Stanley Dean Witter Bank
Ltd and Chase Manhattan International Ltd (as amended, varied, supplemented,
novated and restated to date and from time to time)
10.4 Tax Sharing Agreement, dated January 10, 2003, by and between NTL
Europe, Inc. and NTL Incorporated
10.5 Transitional Services Agreement, dated January 10, 2003, by and
between NTL Europe, Inc. and NTL Incorporated
10.6 De-Merger Agreement, dated January 10, 2003, by and between NTL
Europe, Inc. and NTL Incorporated
10.7 Novation Agreement, dated January 9, 2003, by and among NTL Europe,
Inc., NTL Incorporated, Cable and Wireless plc and certain of each of their
respective subsidiaries
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NTL INCORPORATED
(Registrant)
By: -----------------------------------
Name: Richard J. Lubasch
Title: Executive Vice President,
General Counsel and Secretary
January 10, 2003
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EXHIBIT INDEX
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Exhibits
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4.1 Registration Rights Agreement, dated as of January 10, 2003, by and
among NTL Incorporated and the other parties listed on the signature pages
thereto
4.2 Exchange and Registration Rights Agreement, dated as of January 9,
2003, by and among NTL Incorporated, the Guarantors listed on the signature
pages thereto and the initial purchasers of the Notes
4.3 Indenture, dated as of January 9, 2003, by and among NTL
Incorporated, the Guarantors listed on the signature pages thereto and U.S.
Bank National Association, as trustee
10.1 Purchase Agreement, dated as of January 9, 2003, by and among NTL
Incorporated, the the Guarantors listed on the signature pages thereto and the
initial purchasers of the Notes
10.2 (pound)2,500,000,000 Credit Agreement originally dated May 30, 2000,
and made among, NTL Communications Limited; NTL Business Limited (which
novated its rights and obligations to NTL Investment Holdings Limited); NTL
Communications Corp.; J.P. Morgan plc (formerly known as Chase Manhattan plc);
Morgan Stanley Dean Witter Bank Limited; J.P. Morgan Europe Limited (formerly
known as Chase Manhattan International Limited) and the lenders party thereto
(as amended, varied, supplemented, novated and restated to date and from time
to time)
10.3 (pound)1,300,000,000 Credit Agreement originally dated May 30, 2000,
and made among, NTL Communications Corp.; NTL (UK) Group, Inc.; NTL
Communications Ltd; J.P. Morgan plc (formerly known as Chase Manhattan plc);
Morgan Stanley Dean Witter Bank Ltd and Chase Manhattan International Ltd (as
amended, varied, supplemented, novated and restated to date and from time to
time)
10.4 Tax Sharing Agreement, dated January 10, 2003, by and between NTL
Europe, Inc. and NTL Incorporated
10.5 Transitional Services Agreement, dated January 10, 2003, by and
between NTL Europe, Inc. and NTL Incorporated
10.6 De-Merger Agreement, dated January 10, 2003, by and between NTL
Europe, Inc. and NTL Incorporated
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10.7 Novation Agreement, dated January 9, 2003, by and between NTL
Europe, Inc., NTL Incorporated, Cable and Wireless plc and certain of each of
their respective subsidiaries