Delisting news pummels Adelphia's stock
The Adelphia Communications Corp. saga continues to unfold. The latest: The MSO has defaulted on loan terms and its stock is set to be delisted on Monday from the Nasdaq.
The Nasdaq Stock Market has put Adelphia on notice that it plans to delist the MSO's stock on at the opening of the market on Monday, June 3. The move will likely force Adelphia into bankruptcy because the delisting enables bondholders to force Adelphia to buy back $1.4 billion in convertible debt — Adelphia does not have that kind of cash on hand.
The Nasdaq blamed the delisting on public interest concerns and Adelphia's failure to file its required financial statements with the Securities and Exchange Commission.
The delisting news sent Adelphia's stock into a downward spiral. Shares were trading well below $1 in early morning action, with more than 15 million shares changing hands.
Adelphia also announced it has defaulted on several loan terms. The company said it is in talks with the agent banks under existing credit facilities. The MSO also is trying to obtain additional capital in the near-term as it deals to sell some of its assets.
In response to objections from Leonard Tow, a newly appointed board member, Adelphia has promised not to sell any of its cable assets until Tow is briefed during a board meeting on Saturday. Tow contended in a filing with the SEC that Adelphia management intended to complete the sale of its "most valuable cable properities" by tonight. He said he objects to the immediate sale of the assets.
Adelphia interim CEO Erkie Kailbourne responded to Tow's allegations by saying that no decision will be made before Saturday and that this was the first indication he had received that Tow objected to the asset sales. Kailbourne has challenged Tow to propose a viable alternative.