updated 08:35 pm EST, Thu February 12, 2009
Cable and telephone provider Charter Communications has announced that it will file for Chapter 11 bankruptcy, after reaching an agreement with a debt holders committee that outlined the conditions of a financial restructuring. The company could see a reduction of approximately $8 billion in debt, with a formal filing to occur on or before April 1st. Charter currently has roughly $800 million in cash on hand to help with the restructuring and operations through the transition.
The shareholders will not receive anything from the agreement, as their shares will be canceled. The current debt holders and bondholders will be entitled to a variety of options, including new notes, equity or cash, depending on the seniority and terms of the agreement.
Microsoft co-founder Paul Allen, who currently controls Charter, will continue as an investor and keep the largest voting interest.
Charter provides cable, Internet and phone services to 5.5 million subscribers. The company recently announced the availability of a 60Mbps residential Internet service, with an initial launch in St. Louis before expanding to other markets. Subscribers currently enrolled in the 16Mbps plan will receive an automatic upgrade to 20Mbps download speeds without any increase in monthly contracts. [via New York Times]