Following the resignations this week of two key company executives, Adelphia Communications Corp. on Friday said it and some of its subsidiaries will miss more than $43 million in interest and dividend payments, and that two grand juries are slated to probe the MSO's finances.
Specifically, the MSO said it missed a $23.4 million interest payment on its 9-3/8 percent senior notes due Nov. 15, 2009, and a $6.4 million dividend payment on its 7-1/2 percent series E mandatory convertible preference stock. Additionally, Adelphia subsidiaries Olympus Communications L.P. and Olympus Capital Corp. whiffed on a $10.6 million interest payment on their 10-5/8 percent senior notes due Nov. 25, 2006. Arahova Communications Inc., another Adelphia subsidiary, missed a $4.1 million interest payment on senior notes due Nov. 15, 2017.
The MSO added that "certain of its subsidiaries" made interest payments on back credit facilities on May 15 totaling about $4.7 million.
Erland Kailbourne, who this week replaced company founder John Rigas as Adelphia's chairman and interim CEO, said in a press release that Adelphia decided not to make those payments "because we are now pursuing a thorough evaluation of Adelphia's business objectives and financial requirements."
He added that the MSO added that it's trying to preserve its value and will continue plans to sell assets in order to reduce debt.
Adelphia also confirmed Friday that grand juries in the Southern District of New York and the Middle District of Pennsylvania are investigating the MSO's finances.
Adelphia, whose stock has been under suspension by the Nasdaq since Tuesday, said it attended a hearing before the National Association of Securities Dealers regarding the possible delisting of the company's shares. The MSO said it expects to get an update on its listing status "in the near future," but wasn't more specific.