By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
Charter, Hall's largest cable provider, to file for bankruptcy
Placeholder Image

Charter Communications Inc., the nation’s fourth largest cable operator, said Thursday that it plans to file a prearranged Chapter 11 bankruptcy by April 1.

The largest cable provider in Hall County, Charter offers cable, Internet and telephone service in the city of Gainesville and much of the unincorporated area of Hall. Comcast Communications serves portions of South Hall and the Clermont and Murrayville areas.

Charter, which is controlled by Microsoft co-founder Paul Allen, said it has reached an agreement in principle with certain debt holders to reduce its debt by $8 billion in exchange for combinations of new debt, cash, common shares, warrants to buy stock and preferred shares.

Allen will remain as an investor and retain the largest voting interest in Charter. But Charter’s common stock will be canceled, meaning shareholder stakes will be wiped out. Allen has invested over $7 billion in the company.

In a prearranged bankruptcy, a company enters into reorganization with a plan to emerge that has the approval of major stakeholders.

Charter also said two of its subsidiaries will make a $74 million interest payment before the 30-day grace period for debt that was due on Jan. 15 expires. About $1.9 billion of its debt is due next year. Overall, more than half of Charter’s $21 billion in total borrowings will mature by 2013.

Charter reported that fourth-quarter revenue is expected to increase 6.6 percent to $1.66 billion, with adjusted earnings before interest, taxes, depreciation and amortization up nearly 10 percent to $620 million. Charter has been skirting insolvency for years, but this time it faces a brutal combination of tight credit and billions of debt coming due. The company hasn’t recorded a profit since it went public in 1999.

Charter acquired the Gainesville system from InterMedia Partners in January, 1999. Cable television service in Gainesville dates back to 1966, when John W. Jacobs Jr., owner of WDUN radio, began Gainesville Cable TV. Jacobs sold the system in 1983.

Stephen Loftin, executive director of the Cable Television Association of Georgia, said it is a challenging time for cable operators in the state.

"It’s a very competitive environment," Loftin said. "You’ve got a lot of providers, including direct broadcast satellite and telephone companies."

He said other issues, including retransmission consent agreements with broadcast television stations and additional pole fees for areas served by electric membership cooperatives have also driven up costs.

Loftin conceded that some companies, including Charter, acquired systems when prices were high.

AT&T holds a statewide cable franchise in Georgia and has plans to introduce a wired television service in Gainesville, but has not announced a timetable.

The Associated Press contributed to this report.

Regional events