Telewest will recover

yogro
would you rather own GFM bought at say 6p or TWT bought at say 25P?
tipped as a share for 2002 in the sunday times.

"TELEWEST

THIS may seem like madness — and it is certainly not for the faint-hearted — but 2002 could herald a recovery in Telewest shares. With its biggest rival, NTL, weighed down by debt, Telewest has often been written off along with NTL.

But while its debt of £4.9 billion remains a risk factor, Telewest is not in the same boat as NTL. If the cable company can secure even a modest amount of new money early in the new year the market is likely to rerate Telewest as the funding fears fade.

Over recent months it has brought in GE as an investor, and its biggest shareholders, John Malone’s Liberty and Microsoft, are unlikely to leave it in the lurch. Telewest is one of the few British shares that will benefit from the roll-out of broadband. Its high-speed internet service has proved popular with consumers and is a lucrative area. It is also possible that NTL’s weakness could be an opportunity for Telewest.

If there is further consolidation, it is better placed than its rival to lead the way. There are risks. If interest rates rise, then Telewest’s £2.25 billion loan facility will become more expensive. There is also the possibility of a rights issue to add more equity to the mix. Telewest’s management, led by Adam Singer, has begun to impress the City. If it continues to do so, the shares, 63p, have lots of upside.

Kirstie Hamilton"