FairPoint in talks with lenders
9/28/09 | 4 comments

FairPoint in talks with lenders


By The Associated Press
AP FILE PHOTO

CHARLOTTE, N.C. — Troubled phone company FairPoint Communications Inc. said Monday that it's in talks with some of its lenders in hopes of restructuring its debt, but still may be forced to file for bankruptcy protection.

FairPoint said that as part of those talks it has entered into a forbearance agreement with lenders that together hold more than 50 percent of the loans and commitments outstanding under its credit facility.

FairPoint has payments under the credit facility and its interest rate swap agreements totaling about $42 million due on Wednesday. The company said that it likely will fail to comply with the interest coverage ratio and leverage ratio covenants in the credit facility for the period ending the same day.

Under the agreement, if that were to happen or other certain events of default were to occur, the lenders have agreed to not accelerate the maturity of the loans outstanding under the credit facility or take other action until Oct. 30.

FairPoint said its talks with its lenders are focused on developing a restructuring plan that would reduce its debt and interest expense and improve its liquidity and financial flexibility, but cautioned that such a restructuring plan may require it to file for Chapter 11.

FairPoint, which is based in Charlotte, N.C., owns and operates phone companies in 18 states with a total of 1.65 million access lines, but its largest holdings by far are in northern New England. FairPoint last year bought for $2.3 billion Verizon's landline and Internet assets in Maine, New Hampshire and Vermont, where it has been plagued with customer service and operational problems.

FairPoint shares fell 21 cents, or 32 percent, to 45 cents in midday trading.

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4 comments on this item
On 9/28/09 at 4:07 PM, WinFromOOB wrote:         Repeated separate thumbs down will cause comment to be hidden

Since Verizon wanted out of Northern New England and Time-Warner has cherry picked the profitable high density urban phone service, who is going to take over?

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On 9/28/09 at 4:22 PM, JWBooth wrote:         Repeated separate thumbs down will cause comment to be hidden

Your phones will go dead on Thursday. Thank you Maine PUC.

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On 9/28/09 at 7:16 PM, maineboy wrote:         Repeated separate thumbs down will cause comment to be hidden

Your phone will not go dead on thursday ,unless you forget to charge you battery.

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On 9/29/09 at 12:14 PM, robinhartcordell wrote:         Repeated separate thumbs down will cause comment to be hidden

I find it quite remarkable that this small company was permitted responsibility for such large holdings (of a communications network). The much larger (former) holder, Verizon was evidently unwilling (or incapable) of adequately servicing parts of the service area, as the wiring and switching infrastructure was aging and vulnerable to failure.

Who was it that could possibly have imagined that this little company could (or WOULD) manage an old and failing infrastructure effectively? Were those decision-makers even vaguely AWAKE - or busy sucking down that coffee brandy ???

In my particular area, I cannot GET quality telephone service, let alone internet access capable of 20th century technology.

It took FIVE MONTHS to get my billing straightened out.

FairPoint didn't even BOTHER to notify us that when the Verizon Dial-Up numbers were phased out, that FairPoint would not continue to provide state-wide dial-up internet service numbers in Maine - except in the larger city areas. It just ENDED, with no notice, no alternative - just about like giving US the "universal gesture" (the extended middle finger).

THAT is sheer negligence and/or incompetence. Feed-em to the sharks, they've earned their just reward.

- Middle Finger Extended To FairPoint -

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