Yesterday, Charter Communications officially announced it will file for prearranged Chapter 11 bankruptcy protection by April 1.
Charter has reached an agreement in principle with holders of $8 million in debt who agreed to give up repayment of their debt in return for common shares, or for warrants with rights to common shares that translate into owning the entire company after bankruptcy.
Charter, which is the nation’s fourth-largest cable operator and is controlled by Microsoft co-founder Paul Allen, also announced that two of its subsidiaries, CCH I Holdings and Charter Communications Holdings, will make within the allotted grace period interest payments totaling approximately $74 million in the aggregate on certain of their outstanding senior notes that were due Jan. 15 (story here).
With Thursday’s agreement, Charter has $13 billion of debt that expires from 2013 to 2016.
“We are pleased to have reached an agreement with such a significant portion of our bondholders on a long-term solution to improve our capital structure,” said Charter President and CEO Neil Smit. “We are committed to continuing to provide our 5.5 million customers with quality cable, Internet and phone service, and through this agreement, we will be even better positioned to deliver the products and services our customers demand, now and in the future. Moreover, the interest and support provided by our stakeholders with their new capital investment underscores their confidence in Charter and our business.”
Charter also said its fourth-quarter earnings were expected to increase by 6.6 percent over the same quarter in 2007 to $1.1 billion. The company added 22,300 digital video subscribers in the fourth quarter, while losing 75,100 basic video subscribers. On the data side, Charter added 22,900 customers and 75,200 telephony customers.
“We are pleased with our operational results during the fourth quarter, particularly in this challenging economic environment,” Smit said. “We are continuously expanding our high-definition offering, we’ve recently launched 60 Mbps high-speed Internet service, and later this month we’ll upgrade Charter High-Speed Internet Max from 16 Mbps speed to 20 Mbps. Our operational results continue to reflect the underlying potential of our business, and our talented employees remain focused on offering enhanced products and service for our customers.”