As planned, Charter Communications filed for Chapter 11 today. But since Charter already has agreements-in-principle with some of its major debt holders, the company expects to quickly reorganize and emerge from bankruptcy protection with significantly less debt.
The agreements-in-principle contemplate the investment by a committee of Charter’s major bondholders of more than $3 billion, including up to $2 billion in equity proceeds, $1.2 billion in roll-over debt and $267 million in new debt to support the overall refinancing.
If all goes according to plan, Charter will reduce its debt by about $8 billion.
As previously announced, Paul Allen will continue as an investor and will retain the largest voting interest in the company.
"The financial restructuring is good news for Charter and our customers and, if approved, will result in Charter being better positioned to deliver the products and services our customers demand now and in the future," said Neil Smit, president and CEO of Charter.
"The support of our bondholders and their new investment in Charter also underscores their confidence in our company and business,” Smit continued. “Charter's operations are strong, and throughout this process, we will continue serving our customers as usual. We look forward to an expeditious restructuring, and once completed, we believe that Charter will be a stronger company."
Charter appointed Gregory L. Doody as its chief restructuring officer. Doody has become a restructuring specialist, having engineered several, including those of Calpine and HealthSouth.
More Broadband Direct 03/27/09:
|• Charter enters Chapter 11 |
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|• Proxilliant debuts CAMS 2.0 |
|• Verizon touts backhaul support |
|• Huawei poised to crack U.S. market? |
|• Google ties video ads across Web platforms |
|• Study: In-home TV viewing still dominates |
|• Broadband Briefs for 03/27/09 |