Financial problems linger for Knology
Copyright 2004 Times Publishing Company
St. Petersburg Times (Florida)
March 8, 2004 Monday
Knology Inc., which recently took over Verizon Communications' Americast cable-TV operations in Pinellas County, is hoping to provide a stiff challenge to dominant cable provider Bright House Networks.
Knology, which completed a debt restructuring in 2002, also is working hard to regain its financial footing.
But on Feb. 19, the West Point, Ga., company projected a 2003 net loss of $88-million, widening sharply from a $3-million net loss in the previous year.
Also that day, Knology announced plans to launch a private bond offering worth up to $280-million, saying the proceeds would be used to refinance and pay off debt. Almost simultaneously, Moody's Investors Service slapped a lowly Caa2 rating on the bonds, seven notches below its top noninvestment, or "junk," rating.
Moody's said Knology benefits from a high-quality cable network that allows it to bundle cable TV, high-speed Internet and phone services in one package - something the company is planning to launch in this area this year. But the ratings agency also warned that the company expects to continue to suffer from high debt and other financial challenges, not to mention mounting competition from other, better-financed rivals.
Last week, Knology called off the bond offering.
"Unfortunately, proceeding with the proposed offering in the current market environment would not have provided Knology with the interest expense savings we had expected," president and chief executive Rodger Johnson said in a statement.