Charter Communications to file for Chapter 11
Cable company controlled by Microsoft co-founder Paul Allen aims to shed $8 billion in debt through bankruptcy filing.
NEW YORK (CNNMoney.com) -- Charter Communications, a provider of cable TV, Internet and other broadband services, said on Thursday that it will file for bankruptcy, as part of a "financial restructuring."
The St. Louis-based company said it planned to reduce its debt by $8 billion as a result of a Chapter 11 filing. The company added it intended to file on or before April 1.
"The purpose of Charter's financial restructuring is to strengthen its balance sheet in order to fully support the company's operations and service its debt," said the company, in a press release.
Chief Executive Neil Smit said in the same release that the company "will be even better positioned to deliver the products and services our customers demand now and in the future" as a result of the filing.
The company described its operations as "strong," and said it had $800 million in cash to help meet its needs to continue operating. The company said in its press release that service should "continue as usual."
One analyst said the news was not a surprise and that it could be beneficial for the company.
"This is expected, and this is a fairly traditional style of bankruptcy," said Chris Roberts, analyst for Tejas Securities Group. "By cutting interest expense, they'll generate more cash flow to help invest in the business."
Charter, which has about 5.5 million customers across the country, is the nation's third largest publicly traded cable company, behind Comcast (CMCSA, Fortune 500) and Time Warner Cable (TWC). (Time Warner Cable is a subsidiary of Time Warner, which also owns CNNMoney.com. Time Warner (TWX, Fortune 500) plans to spin off Time Warner Cable later this year.)