Telewest Communications revealed yesterday that its banks have agreed to allow the debt-laden cable group to press ahead with talks it says will almost certainly lead to a debt-for-equity swap. Existing shareholders in such companies will be left with next to nothing.”Telewest has secured the necessary waivers and consents from its bank group to permit it to enter into discussions with, among others, its bondholders concerning a possible reconstruction of its balance sheet,” the company said.The waiver was necessary because Telewest had been prevented from forging any deals with its bondholders that would damage the lenders’ prospects of getting their money back.The newly installed managing director Charles Burdick announced at the start of this month that Telewest would seek the waiver, saying: “We’re moving down the steps to a debt-for-equity swap. It is becoming more and more likely.”Bankers said the fairly quick response to the request indicated their confidence in Telewest’s recovery prospects, despite wider concerns about the cable sector.”Revenue growth at a sufficiently high speed remains an issue for lenders. We need to see it growing fast enough to service the debt,” one banker said. “Banks are happy that they’ll get their cash back as long as the company can grow revenues fast enough.”The waiver is the first step in what is likely to be a drawn-out process, along the lines of NTL, which bankers see as a post-restructuring merger partner for Telewest.Equity and credit analysts were generally unmoved by the waiver, which had been expected. “We’ll have to wait until we get something solid in our hands,” one analyst said..

AMP is closing its £14bn Pearl with-profits fund in favour of a new style smoothed-managed fund to preserve capital that has ebbed away in falling stockmarkets. “In the current environment it is prudent to maintain our financial reserves,” said Paul Batchelor, the chief executive of AMP.Mr Batchelor said closing the Pearl fund and opening a new fund would “facilitate the efficient use of capital and improve its regulatory capital position”.New AMP customers will now be offered a smoothed-managed fund, called a 100/0 fund, where 100 per cent of returns are used for policyholder bonuses.Traditional with-profits funds, in which there is around £350bn invested in the UK, are managed on what is known as a 90/10 basis. Shareholders are entitled to 10 per cent of profits, and policyholder bonuses are paid with the rest. These funds have been criticised as opaque and giving an unfair deal to policyholders.Ron Sandler, the former Lloyd’s of London chief executive who was asked by the Treasury to investigate the with-profits industry, has recommended insurers adopt a 100/0 structure as a replacement to with-profits. Prudential is also considering setting up a new 100/0 fund.AMP’s move only affects new customers, but the group is looking at the possibility of converting the existing £14bn Pearl with-profits fund to the new structure.

It has already had to pump £400m into its UK life insurance funds to keep them from breaching solvency requirements.”The shift to more modern products, together with previously announced capital initiatives, will enable us to meet the minimum regulatory capital requirements for all our UK funds at FTSE levels several hundred points below current levels,” Mr Batchelor said.Last month AMP said it was to stop selling its Pearl with-profits bond and bonuses would be cut.. The bidding frenzy for Coffee Republic heated up yesterday after it emerged that Stelios Haji-Ioannou, the easyGroup entrepreneur, had approached the loss-making chain about a possible takeover. Bobby Hashemi, the group’s co-founder and executive chairman, is reviewing the group’s strategic options following a £7.5m loss last year.While the group has admitted to receiving “an approach” it has declined to comment further. “As and when something concrete happens we’ll tell the stock exchange,” a spokeswoman said.Mr Haji-Ioannou said the Coffee Republic outlets would suit the new, smaller format of his internet chain. After a disastrous experiment with large sites capable of holding 500 screens, which cost Mr Haji-Ioannou millions of pounds, the new look chain of nine stores is focusing on smaller sites and franchising the catering to operators such as Caff?ero.He said that the ball was in Mr Hashemi’s hands “You can’t force a company to give you information. All I can do is to hope they will decide as a board that in order to maximise value to shareholders they will release the information.” However, he added that he was “not particularly wedded” to Coffee Republic. “I’m sure there are other people out there,” he said.The Greek entrepreneur said he was also talking to Starbucks about an agreement to supply internet terminals in its stores, which has installed internet computers at some of its London outlets on a trial basis..