TROUBLED cable company ntl has announced a life-saving financial restructuring, which will see £7.4bn of its debt converted into equity.

The group, which has more than 150,000 customers in the Tees Valley, has been struggling under a debt mountain of £11.9bn. It will also have £357m of new finance pumped in by bondholders.

Ntl said the company would now be fully funded, and the debt reduction would produce more than £556m of yearly interest savings.

The group said operations would continue uninterrupted, customer service would be unaffected, suppliers would be paid and management would remain in place.

As part of the deal, ntl will file for Chapter 11 bankruptcy protection in the US. Its operating subsidiaries will not be included in the filing.

Ntl acquired its huge debts by overspending on acquisitions such as Cable & Wireless Communications in Britain and Cablecom in Switzerland.

Peter Wilcock, ntl's managing director for the North-East said: "The past few months have been challenging for ntl as we strove to improve our efficiencies but this was essential - not just to reassure our customers that it was 'business as usual' but, more importantly, to improve considerably their experience of ntl.

"We have more than 152,000 customers in Teesside and Darlington and we are truly committed to them. Not only have they stayed loyal to us but they have proved very receptive to our new services.

"We are not yet where we want to be - but we are working hard to get there and all our associates in Teesside are dedicated to the cause."