TWC move to go public advances
EmptyNEW YORK -- Time Warner Cable is likely to become a publicly traded company by the end of January, after a judge approved the bankruptcy plan for Adelphia Communications Corp. this week, analysts said Thursday.
Adelphia is using a 16% stake in Time Warner Cable to pay its creditors as part of a 2005 deal for Adelphia's cable assets. Once the shares are distributed, Time Warner is expected to register them with the New York Stock Exchange to pave the way for public trading.
Judge Robert Gerber, who presided over the Adelphia bankruptcy proceedings, approved the bankruptcy plan on Wednesday at the United States Bankruptcy Court, Southern District of New York, after four and half years of wrangling with creditors and several altered plans.
Analysts have predicted that Time Warner Cable shares could trade as early as two weeks after the approval.
In October, Time Warner Cable had filed an S1 form with the U.S. Securities and Exchange Commission for an initial public offering, but that is now seen to be unlikely.
"The IPO would be much more expensive due to underwriting cost borne by TWC," Michael Nathanson, analyst at Sanford Bernstein, said Thursday.
Time Warner, which is the second-largest U.S. cable operator with around 13.5 million subscribers, is seen to be an attractive stock for investors, analysts have said.
"If TWC comes out at a discount to asset value, the stock would be in demand," said Nathanson.
Adelphia began bankruptcy proceedings back in 2002 following one of the biggest accounting scandals in U.S corporate history. It was the fifth-largest U.S cable operator with around 5 million subscribers.
Adelphia is partially using a 16% stake in Time Warner Cable worth nearly $6 billion to pay its creditors, as part of a 2005 deal for Adelphia's cable assets agreed with Time Warner Inc. and Comcast Corp.
Under the terms of the agreement, creditors who are paid with the Time Warner Cable shares must float at least a third of their stock.
Time Warner declined to comment. An Adelphia spokesman was unavailable for comment.