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RCN seeks extra $20M

Mon, 11/01/2004 - 7:00pm
Soma Biswas

Copyright 2004

Daily Deal/The Deal

November 2, 2004 Tuesday

RCN Corp. is looking for court approval to increase its exit financing by $20 million to a total of $480 million.

The company has lined up a $460 million exit financing package from Deutsche Bank AG, and it plans to boost the $285 million term loan portion of it to $320 million.

RCN plans to use the extra funds to buy the half stake in Starpower Communications LLC it doesn't already own from Pepco Holdings Inc.

In October, RCN said it was buying out its Starpower joint venture, which provides telecom, cable and broadband services in Maryland and Virginia, for $29 million.

A hearing on the $20 million in extra financing is scheduled for Nov. 16 before Judge Robert Drain in the U.S. Bankruptcy Court for the Southern District of New York in Manhattan.

Princeton, N.J.-based RCN filed for Chapter 11 on May 27, 2004.

On Oct. 15, Drain approved a disclosure statement setting out a plan of reorganization that gives RCN's bondholders most of the equity in the company.

A confirmation hearing is set for Dec. 8.

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