Beleaguered Adelphia Communications Corp. is making a move to try and improve its financial situation - the company is soliciting bids for cable systems that serve half its subscriber base.
The systems that are up for sale serve roughly 2.7 million subscribers. The specific systems being put on the block include systems in Southern California (1.2 million subscribers), Florida (750,000), Virginia (575,000) and the Southeast (225,000). Adelphia has decided to put these systems up for sale after receiving informal inquiries for some of the systems.
Adelphia says it is ready to solicit formal bids, and will begin distributing information about the systems to potential buyers next week. The company warns, however that it can make no assurances that the solicitation will lead to any sales. If the systems are sold, Adelphia says it will make some headway in reducing its debt and deleveraging its balance sheet.
Like so many of its telecom brethren, Adelphia is under the watchful of the Securities and Exchange Commission for some of its accounting practices. Earlier this month, the cabler announced plans to restate financial results for 1999, 2000 and interim financial statements for 2001. At the time of the announcement, CED Broadband Direct reported Adelphia had tentatively concluded that restatement should reflect borrowings and related interest expense under certain co-borrowing arrangements with amounts payable directly or indirectly by certain Rigas family-owned entities. Those borrowings were approximately $1.6 billion as of Dec. 31, 2001; $1.2 billion as of Dec. 31, 2000; and $700 million as of Dec. 31, 1999.
The Nasdaq has warned Adelphia it faces a possible delisting for failing to file its 10-K with the SEC.