Charter plans bankruptcy filing

Published 10:09 pm Wednesday, February 18, 2009

As Charter Communications Inc. prepares to declare bankruptcy by April 1, Suffolk officials are evaluating what will be the likely effects the company’s plans on its cable, Internet and telephone subscribers in Suffolk.

Charter announced last week its intention to file for bankruptcy as part of a plan to refinance and restructure about $8 billion of its $21 billion in debt.

The company has assured customers that its plans will not affect them and that it “remains focused on continuing to provide its customers with quality service and support today and going forward,” according to a press release in which the company announced its intentions.

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Officials with the city of Suffolk, however, are troubled about the news and about its bearing on the company’s future here.

“It’s certainly something that we take very seriously,” Suffolk spokeswoman Debbie George said on Tuesday. George noted that the city continues to negotiate with the company on a renewal of its franchise agreement.

“We are discussing with our attorney as to what impact this will have” on those negotiations, she said.

Charter has a non-exclusive franchise agreement to provide cable services to Suffolk residents. That agreement is up for renewal this year, and the City Council agreed just last month to extend it while it negotiates with the company.

City officials also made clear during the process that they were dissatisfied with Charter by advertising a request for proposals from other cable television providers who might be interested in providing services to Suffolk’s vast area.

There were no responses to that RFP, George said, noting that potential new cable providers would have faced some of the same problems in Suffolk that Charter has, especially in terms of providing a high level of service to the city’s most remote and least populated areas.

The company has about 27,000 customers in Suffolk, Franklin and the surrounding areas, according to a company spokeswoman.

Charter’s recent announcement was the culmination of nearly a month’s worth of work toward finding a way to deal with the company’s crushing debt. That month-long process began when the company missed a $74 million interest payment on bonds that was due Jan. 15.

Working with a committee of its creditors, company officials developed a plan whereby they would raise $3 billion through refinancing debt and getting new capital. Two of the company’s subsidiaries — CCH I Holdings and Charter Communications Holdings — will provide the $74-million interest payment the company missed in January.

The deal leaves the company with $800 million in available cash and cash equivalents, according to a news release.

“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 Neil Smit, president and chief executive officer. “We are committed to continuing to provide our 5.5 million customers with quality cable, Internet and phone service.”