[SMHarman]

This is similar to the Marconi (and I believe NTL), and soon possibly Eurotunnel deals that have / will occurred in recent years. The company borrows and borrows and the investment does not produce the revenue stream to pay the cost of borrowing, or even if it produces a revenue stream to pay the interest cost, it does not show the ability to ever repay the debt. The banks want their capital back and the arrangement of the loan means they can forclose and liquidate the company. This is not in the best interest of anyone, so they do a debt for equity swap and dilute your shareholding and replace their debt with equity, this equity does not require repayment and only requires dividend payment when cashflow can support it, thus putting the company on a sustainable footing going forward.

Boffins, Accountants and Lawyers look at this and work out the best way to restructure, in the TW case it involved creating a new corporate entity.

So have you been shafted, well you invested in a company that did not perform and as a result lost money, however you still have a stake in the pheonix company so it could be worse. Who shafted you, the banks who when they realised they could not get their money back took action, or the directors who borrowed it in the first place, or Sky who bent all the rules of their licence to achieve success more quickly or the global telecoms market which resulted in the cost of voice calls falling rapidy, or the FA for charging fortunes for pay football.