Payments of $73.7 million were due yesterday on bonds issued by two subsidiaries of cable MSO Charter Communications, but the payments were not made. Charter, controlled by Paul Allen, said it is in negotiations with bondholders about the company’s capital structure and has a 30-day grace period before the bonds are in default. The company noted that it does have enough cash on hand to make the interest payments.
“We are engaged in discussions with our bondholders aimed at improving the Company’s capital structure,” said Neil Smit, President and Chief Executive Officer. “We’ve made significant progress over the last several years with regard to operational improvements and we hope to make similar progress with regard to our capital structure. Charter provides a valuable service in an industry that continues to show strong demand, and our goal throughout this ongoing process is to take steps that will better position Charter for the future. These discussions with our bondholders do not affect our commitment to continuing to offer customers reliable service, enhanced product offerings and quality care,” he added.
Charter said the company and its subsidiaries had cash on hand and cash equivalents as of January 13, 2009 in excess of $900 million. It announced last month that it had begun talks with its creditors on restructuring its balance sheet.
For the two bond issues which had interest payments due January 15th, the company said it had a 30-day grace period through February 15th in which to make the interest payments. The two issues had principal amounts outstanding of $949 million and $204 million.
