Charter Communications files for bankruptcy
Paul Allen's cable firm done for by credit crunch
US cable firm Charter Communications Inc, which is controlled by Microsoft co-founder Paul Allen, filed for bankruptcy protection on Friday.
The firm confirmed last month it would make the move by 1 April following a deal it had agreed with senior debt holders.
Charter said it had previously been able to pay for or renew its debt, but added that the recent economic decline had hit the company hard. As of the end of 2008 Charter carried a hefty debt load that totalled $21.7bn.
It reiterated that the cable firm had inked an agreement in February with creditors to help Charter reduce its debt by $8bn.
Analysts expect the company to get out of Chapter 11 once it reorganises its debt pile.
Charter hopes to slash annual interest payments by $830m and ease its cash flow situation. The company said subscribers would be served as usual during the bankruptcy period, which Charter expects to emerge from in August.
Allen will be given up to seven per cent of equity in the company, which had been controlled by his equity stake prior to the Chapter 11 filing. He will also keep the biggest voting interest of 35 per cent at the firm.
Charter’s statement is here, the company has 5.5m customers and 16,500 staff. ®