Charter Communications ready to exit Chapter 11


A federal bankruptcy judge has approved the pre-arranged reorganization plan that Charter Communications struck with its major creditors. The cable MSO should soon emerge from Chapter 11 protection from creditors with about $8 billion less in debt.

“The Court’s confirmation of our plan is a great accomplishment for Charter and a positive outcome for our customers, vendors and employees. It reflects the support of our many stakeholders,” said Neil Smit, President and CEO. “Throughout this process, Charter has taken great care to consistently put customers first, while posting solid operating results. Charter continues to move forward – we are improving our video, high-speed Internet and telephone services, adding new ways to reach customer care agents and scheduling more convenient service appointments, all centered on enhancing the customer experience. Going forward, Charter will continue to provide simple, customer-oriented entertainment and communications solutions and upon emergence, will have an improved capital structure,” he said.

The company said the bankruptcy judge’s confirmation of the pre-arranged plan paves the way for Charter to successfully conclude one of the largest and most complex pre-arranged financial restructurings ever. Once the plan becomes effective, Charter expects to generate positive free cash flow through the reduction of more than $830 million in annual interest expense. The current debt of Charter subsidiaries CCO Holdings LLC and Charter Communications Operating LLC will be reinstated under pre-existing pricing and maturity dates. In addition, the plan provides for the reduction of approximately $8 billion of debt, approximately $1.6 billion in proceeds from an equity rights offering to support the overall refinancing, and the exchange of approximately $1.7 billion of CCH II notes for new 13.5% CCH II notes due 2016.

Existing shares of the company’s common stock will be cancelled. Paul Allen will continue as an investor, and will retain the largest voting interest in Charter. Allen revealed just this week that he is battling cancer for the second time in his life.

Charter said it intends to apply for listing of its new common stock issued in accordance to the plan on The Nasdaq Stock Market not earlier than 45 days after emergence from Chapter 11.

The old stock, which is to be cancelled as worthless, still traded this week at more than a cent and a half per share.