Charter files debt-restructuring plan
Cable company will get more than $3 bil from bond holdersNEW YORK -- Charter Communications, the cable operator controlled by Paul Allen, has filed a pre-arranged plan to restructure its debt under Chapter 11 bankruptcy protection.
The St. Louis-based company said last month that the filing would come by April 1. Microsoft co-founder Allen will continue as an investor and will retain the largest voting stake in the company.
Under the plan reached with key debt holders, the nation's fourth-largest cable company by subscribers will get more than $3 billion in investments from bond holders via new and rollover debt and equity proceeds.
Charter said it plans to reduce its industry-leading debt load of $21.7 billion as of the end of 2008 by about $8 billion. The debt partly stems from an acquisition spree in the 1990s.
Charter also has appointed Gregory Doody as chief restructuring officer. He will oversee the bankruptcy process, which some experts say could be completed within months, after overseeing the restructurings of power producer Calpine Corp. and health-care firm HealthSouth in recent years.
"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," Charter president and CEO Neil Smit said Friday. "The support of our bondholders and their new investment in Charter also underscores their confidence in our company and business."
A hearing in the Charter bankruptcy case before Judge James Peck at the U.S. Bankruptcy Court for the Southern District of New York is scheduled for Monday.