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Charter Communications to file for bankruptcy

updated 08:35 pm EST, Thu February 12, 2009

Charter bankruptcy

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]




by MacNN Staff

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  1. leamanc

    Joined: Dec 1969

    0

    I have the 10 megabit...

    ...any chance they might upgrade me to 16 megabit for no extra money? :-)

    Really, though, what the heck is up with them rolling out 60 megabit and upgrading existing users when they are going bankrupt?

    I wish them the best. Their cable modem service is by far the most competitive high-speed offering in my area, with the best dollar-to-megabit ratio around.

  1. testudo

    Joined: Dec 1969

    +1

    rolling out

    They need to roll out the expanded services to try to attract/keep customers, who might otherwise go "Sure, Charter is great. But the incompetents at Comcast are offering me twice the speed. I'll go there..."

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