DEBT-LADEN cable company Telewest posted sharply reduced losses as it moves towards the completion of a financial overhaul.

Announcing results for last year, the group said it hoped a debt-for-equity agreement with creditors could be sealed late in the second quarter.

Telewest said it had been encouraged by a solid trading performance during 2003 as operating losses before exceptional items narrowed to £62m from £241m a year earlier.

Net losses were £272m against £2.23bn in 2002 - a comparison distorted by £1.48bn in one-off accounting charges last time.

Telewest provides multi-channel television, telephone and Internet services to about 1.7 million UK households, as well as voice and data telecommunications services to 70,000 business customers. Its content division, Flextech, is the BBC's partner in UKTV.

The figures showed turnover increased by £30m to £1.33bn as strong broadband subscriber growth helped Internet-based revenues almost double to £120m.

Telewest said the average amount of money spent by customers had risen to a record £44.42 a month by the end of the year.

Telewest announced details of its financial overhaul in September as the company looked to reduce its £5.37bn debt mountain.

Under the debt-for-equity agreement, bondholders agreed in principle to swap about £3.5bn in debt for a 98.5 per cent holding in the group. Existing shareholders will have the remaining 1.5 per cent of the company.