Charter subsidiaries won’t make $73.7M interest payment

Thu, 01/15/2009 - 7:35am
Mike Robuck

Charter Communications said that two of its subsidiaries have missed $73.7 million in interest payments that were due today.

CCH I Holdings LLC and Charter Communications Holdings LLC have not made scheduled payments of interest on some of their outstanding senior notes.

“We are engaged in discussions with our bondholders aimed at improving the company’s capital structure,” said Charter President and CEO Neil Smit. “We’ve made significant progress over the last several years with regard to operational improvements, and we hope to make similar progress with regard to our capital structure.

“Charter provides a valuable service in an industry that continues to show strong demand, and our goal throughout this ongoing process is to take steps that will better position Charter for the future. These discussions with our bondholders do not affect our commitment to continuing to offer customers reliable service, enhanced product offerings and quality care.”

According to the terms of the debt, Charter has a 30-day grace period, which would give the nation’s fourth-largest cable operator until Feb. 15 to make its interest payments.

If Charter doesn’t make the interest payments by the Feb. 15 deadline, holders with 25 percent of the principal amount on the notes could call them in and ask for the full amount to be paid immediately.

Charter and its subsidiaries’ cash on hand and cash equivalents, as of yesterday, were in excess of $900 million, which is available to pay operating costs and expenses.

On Dec. 12, Charter said it was initiating discussions with its bondholders regarding financial alternatives to improve the company’s balance sheet (story here).

Yesterday, Charter said it had adopted a new executive compensation plan as part of its ongoing program to improve its bottom line (story here).

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