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Cablevision ranks low in liquidity

Wed, 10/02/2002 - 8:00pm
Harry Berkowitz

Copyright 2002 Newsday, Inc.

Newsday (New York, NY)…10/03/2002

From LexisNexis

Cablevision Systems Corp. ranks among companies most likely to run out of cash in the next 12 months, Moody's Investors Service said yesterday in unveiling a new ranking system.

The new ratings of liquidity are separate from Moody's bond ratings, which already gave Cablevision bonds junk status.

Moody's gave Cablevision an SGL-4 rating, the lowest of four liquidity ratings on the new list, even though the cable TV company has described a retrenchment plan to close a funding gap of up to $1 billion in next year's budget. Cablevision is among six companies - which include Revlon Consumer Products and RCN Corp. - to get the lowest rating out of the initial 37 companies rated.

A Cablevision spokeswoman declined to comment.

In rating Cablevision, Moody's cited "the high level of both planned and requisite capital spending during the second half of 2002, a good portion of which represents non-core investment activities."

Cablevision's stock price fell yesterday 9 percent, or 84 cents a share, to $8.36, down 82 percent this year.

The ratings firm said Cablevision's retrenchment could cut into growth prospects for revenue and cash flow. Also, the restructuring, which includes shutting 26 of 43 stores in The Wiz chain, cutting staff by 7 percent, switching digital set-top box suppliers and putting the Clearview Cinemas chain up for sale, involves certain costs for the company.

"Taken collectively," Moody's said, "these items could further strain the company's current and future cash resources."

Moody's said Clearview "may be of questionable value and somewhat difficult to sell." It also said cash on hand and future cash flow from the company's Rainbow Media programming unit - which Cablevision said it may draw on — may not be enough to cover the shortfall.

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