BT heads could roll in City cash call

The beleaguered UK telco owes £30bn and is considering a record breaking cash call from its shareholders. However, some of the City's major investors indicated this will only be possible if BT released its chairman Sir Iain Vallance and chief executive Sir Peter Bonfield.

Philip Hampton, new finance director at BT, indicated in the Sunday papers that a cash call could indeed be pursued and said the board would consider anything that is in the "best interest of its shareholders".

He added: " If we are going to raise a lot of money, we have to write a convincing prospectus on the future of the business."

Tony Lock, a senior analyst at Bloor Research, said the most important topic on BT's agenda is to reduce its debt and this is why it is feasible some very senior people may be forced to step aside.

He said: "Its debt commitments are huge and this makes the money men very twitchy."

A £5bn rights issue, giving shareholders the opportunity to buy new shares at a large discount to its current price, would be the biggest cash call in British corporate history. Last summer, the media group Pearson raised £1.7bn to help finance an acquisition.

Bonfield admitted recently that BT paid £10bn more than it expected for 3G licences. The City clearly blames both Bonfield and Vallance for the company's demise. BTs share prices have fallen from £15 to £5.55 in the last year.