Shares in the cash-strapped telecoms and cable television operator NTL dipped sharply yesterday when the firm confirmed it planned to raise $500 million in a bond issue. NTL, whose Irish & UK operation will announce the results of a full scale business review this week, said the bond issue would fund its "needs during the next three years".

NTL also previewed tomorrow's first-quarter results by saying income was likely to be up 6 per cent to £622 million compared to the previous three months.

Earnings before interest, tax, depreciation and amortisation (EBITDA) will also rise by 32 per cent to £86 million. The company said it was on track to meet or exceed its 2001 financial targets for revenue and EBITDA.

But the stock dropped 10 per cent in early trade in New York as analysts said convertible bonds proved a more attractive prospect than the shares, which had rallied in recent weeks.

NTL is the UK's biggest cable operator. It has built up high levels of debt after pursuing an aggressive acquisition campaign, which included the £8.2 billion purchase of Cable & Wireless's UK interests last May.

Chief executive officer Mr Barclay Knapp said the group was "very proud" of the results, and both figures were on track to meet financial requirements.

The group ended last year with £2.2 billion available and has since gone on to receive commitments for over £1 billion, Mr Knapp added.

Last November's business review was initiated in a bid to identify saving opportunities. There is considerable speculation NTL will announce major cuts this week.

Earlier this year, NTL revised its plan to introduce a broadband digital television and telephony service in Dublin, Galway and Waterford due to the high cost of laying fibre.

The company now plans to use its existing cable network to provide a limited digital television service to Irish consumers. (additional reporting Reuters)