MUMBAI: Time Warner and Comcast have announced an agreement. This provides Comcast with an option to reduce its effective overall interest in Time Warner Cable from approximately 21 per cent to 17 per cent in exchange for stock of a subsidiary that will hold cable systems and cash.

Comcast claims to be the largest provider of cable and broadband services in the US. It serves more than 21 million cable television customers and more than six million high-speed Internet customers.

The agreement grants Comcast the option, which can be exercised between 1 December 2004 and 1 April 2005. It will require Time Warner Cable to redeem a portion of the Time Warner Cable common stock held by the Comcast trust in exchange for 100 per cent of the common stock of a Time Warner Cable subsidiary. At the time of exchange, the subsidiary will own cable systems serving about 90,000 basic subscribers and approximately $750 million in cash.

Time Warner chairman and CEO Dick Parsons said; "This announcement is another example of our working closely with Comcast to reach a mutually beneficial outcome to the business matters facing our companies. For our part, if Comcast chooses to exercise its option, we'll have the opportunity to increase ownership of our cable company based on a mutually attractive valuation.

"In addition, the trust that holds Comcast's interest in Time Warner Cable has agreed not to ask us to begin the process to register its Time Warner Cable ownership for at least the next six months. This provides the two of us with time to explore alternative approaches to facilitating Comcast's exit from its ownership position in Time Warner Cable. I look forward to continuing this productive relationship with Comcast."