FairPoint Says Goodbye to Bankruptcy

By Josh Long Comments

FairPoint Communications Inc. recently announced that it has emerged from bankruptcy, shedding about $1.8 billion in debt.

The telecommunications provider revealed last week it now has about $1 billion in debt.

Charlotte, N.C.-based FairPoint also said it has secured a $75 million revolving credit facility that is available for working capital and general corporate purposes.

In connection with its reemergence from bankruptcy, FairPoint named a new board of directors. 

The board includes chairman Edward D. Horowitz, Todd Arden, Dennis J. Austin, Michael J. Mahoney, Michael K. Robinson, David Treadwell and Wayne Wilson.  FairPoint CEO Paul H. Sunu also serves on the board.

As a local exchange provider in 18 states, FairPoint sells telephone, data, Internet, television and broadband services. 

The company’s largest customer base is in Maine, New Hampshire and Vermont. The three-state region in northern New England comprises about 85 percent of FairPoint’s business, said company spokeswoman Rose Cummings.

In a press release Jan. 24, the company said “it is now well positioned for future growth in northern New England after having expanded the availability of high-speed Internet service and making systems and process improvements."

Last week shares of FairPoint began trading on the Nasdaq Stock Market under the ticker FRP. 

The bankruptcy completely wiped out the value of the company’s old common stock, and holders of FairPoint’s old stock did not receive any distribution under the reorganization plan. Instead, the plan authorized the issuance of new common stock to holders of the company’s pre-bankruptcy bank debt, high-yield bonds, certain unsecured creditors and certain company employees and directors.

The company said it had approximately 26.3 million shares outstanding at the time it emerged from bankruptcy. 

On Jan. 13, 2011, a U.S. bankruptcy court in New York confirmed FairPoint’s plan of reorganization. The plan became effective 11 days later. 

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