Paul Allen's cable firm files for Chapter 11
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Charter Communications Inc, which is controlled by Microsoft cofounder Paul Allen, will file for Chapter 11 bankruptcy protection by 1 April after striking a deal with senior debt holders yesterday.
The US cable firm said in a statement that it had reached an agreement with some of its creditors to help it reduce its debt by $8bn. Since 30 September 2008 Charter has been saddled with a debt load of around $21bn.
As part of that deal shareholders have been frozen out and will receive nothing, while debt holders and bondholders can expect a mix of new notes, equity and cash depending on how high up they rank on the firm’s list, said Charter.
“We are pleased to have reached an agreement with such a significant portion of our bondholders on a long-term solution to improve our capital structure,” said Charter president and CEO Neil Smit.
“We are committed to continuing to provide our 5.5 million customers with quality cable, internet and phone service, and through this agreement, we will be even better positioned to deliver the products and services our customers demand now and in the future.
“Moreover, the interest and support provided by our stakeholders with their new capital investment underscores their confidence in Charter and our business,” he said.
The company plans to make an overdue interest payment of $74m before a final deadline of 15 February.
Charter, said that as of 11 February it had more than $800m in cash on its balance sheet, also offered its outlook for the fourth quarter.
It expects to see pre-tax earnings to grow to 9.7 per cent to $620m and predicts revenue to climb seven per cent to $1.656bn. Charter will also record an impairment charge of $1.5bn for the quarter ended 31 December 2008.
The firm said it expected to be around 50,000 subscribers lighter, after 75,100 people dumped its basic video service. It was only slightly offset by signing up 22,300 net digital subscribers for the Q4 period. ®
COMMENTS
Mr. Anon.coward
Regarding the mention of MS, please do not get your tits in a tangle over this
I was going to say I love MS to help calm you down , but decided not to,
Fat cats don't have to pay their debts
Joe K: "So in the US you can just get billions/millions in debt, file this Chapter 11 thing, and all your debts are gone? I know thats not the way, but it seems to be recently. File it, creditors get nothing, business as usual."
Yes but only the *rich* get to do that now - it's a subset of the well-known phenomenom called "corporate welfare." The rich right-wing Republicans think it's wonderful, because it protects their royal asses - that way, they can use TAXPAYER MONEY for executives' Golden Parachutes and fancy yachts etc. All that bullshit about Republicans being fiscal conservatives only applies to their OWN money, not someone else's!
Meanwhile, their former workers and stockholders are having their houses repo'd or wondering how long it will be before they're waiting in line with the winos and the much-despised "welfare moms" and other degenerates at the food-bank.
For *normal* working people (not the rich hoity-toity), there have been laws enacted (several years ago) that make it much more difficult for Joe Average worker to file bankruptcy... hmm... almost like they knew it was coming...
Greedy fat cats win, as always. Nothing new there. Just more public and visible this time, is all. They've become quite bold.
Greedy bastards, short-term profit
"Did they spend it all on cocaine and hookers?"
Probably. It's the stylish thing to do, you know :( And of course they'd have to have a few high-priced luxury cars and at least two wondrous seaside vacation homes too. They have their image to maintain, after all.
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