BARCLAY KNAPP, the chief executive who led NTL into Chapter 11 bankruptcy protection, is preparing to sell up to $1.4 million (£874,000) worth of shares in the cable company.
In a filing to stock market regulators in the US late on Friday night, Mr Knapp and other NTL executives formally notified investors that they were considering the unrestricted sale of their shareholdings. As part of the filing, Mr Knapp said that he was ready to sell his entire holding of 32,600 shares, worth $1.4 million at Friday’s closing price.
The notification demonstrates how fast Mr Knapp’s personal fortunes are recovering, after he persuaded NTL bondholders to forgive $10.6 billion of debt that he had helped to run up.
Since NTL relisted after its exit from Chapter 11 in January, its shares have soared 153 per cent from $17 to $43.10, valuing the group at $2.1 billion (£1.3 billion).
That has boosted dramatically the value of Mr Knapp’s stake, which was awarded to him as a bonus when the capital restructuring was concluded.
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Mr Knapp’s shareholding is likely to be boosted by the award of even more lucrative share options — although full details of these have yet to be released.
NTL has granted over three million options to its key managers, mostly at a time when the stock was at half its current level. However, the company has not yet revealed the price at which the options kick in, or how much each director has been awarded. The options are understood to start vesting from next April, a year after the first batch was issued.
Quarterly figures released by NTL in May showed that the company was ahead of its business plan. But despite the massive capital reconstruction, NTL is still heavily indebted, with $5.8 billion of borrowings including a $558 million facility that pays 19 per cent interest.
Last autumn, bankruptcy court filings made by NTL revealed that the company bolstered Mr Knapp’s salary from $370,000 last year to $700,000 following the relisting of the company.
His contract runs to December 2003, at which time he can be dismissed at a cost of $1.4 million, twice his salary. If he maintains his employment beyond that date, as expected, he becomes eligible to receive three times his basic pay, or $2.1 million at current rates.
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In early 2002, NTL initiated talks with its bondholders in an attempt to convert a substantial portion of its debt into new shares. That took almost exactly a year and cost the jobs of the chairman, George Bluementhal, and chief financial officer, John Gregg.