Charter files for bankruptcy

Cable provider says operations to ‘continue as usual’

By Scott Nicholson

Charter Communications, the cable television provider for much of the High Country, is undergoing financial

restructuring in a bankruptcy filing.

The corporation said operations will continue as usual during the Chapter 11 filing, which is expected by April 1. Charter, which is controlled by Microsoft co-founder Paul Allen, has a $74 million debt payment due on several of its divisions’ lines of credit.

On Feb. 12, the corporation announced a restructuring plan to reduce its debt by $8 billion and said it had $800 million in cash available. Under the refinancing plan, Allen will remain as an investor and have the largest voting interest in the company.

Charter Communications, Inc., the third-largest publicly traded cable operator in the United States, serves about 5.5 million customers in 27 states. A Fortune 500 company, Charter is headquartered in St. Louis, Missouri, and its stock is traded on the NASDAQ stock exchange.

The company provides basic cable service, high-definition television, digital cable, telephone and Internet packages.

According to its last financial statement, Charter released a statement that said, “The purpose of CharterÕs financial restructuring is to strengthen its balance sheet in order to fully support the CompanyÕs operations and service its debt. As such, the agreement-in-principle contemplates paying trade creditors in full.”

The bankruptcy was not a surprise to industry observers, as the investment-ratings agency Moody’s had been downgrading Charter Communications over the course of the past year. Share prices had reached as low as 2 cents each but investors began buying the shares on the speculation that the bankruptcy filing would increase the company’s solvency.

Charter Communications once had a franchise agreement with Watauga County, but the state took over franchising during cable deregulation and any cable company can now provide service in the region. AT&T has recently announced plans to provide communications service in the area and will seek a franchise agreement with the N.C. Attorney General’s Office.