NEW YORK (Reuters) – Charter Communications Inc said on Thursday that it reached an agreement in principle with a debt holders committee on terms of a financial restructuring, to be done under Chapter 11 bankruptcy protection, to reduce Charter’s debt by about $8 billion.
The cable operator, controlled by Microsoft co-founder Paul Allen, said in a statement it would file for Chapter 11 on or before April 1.
Various debt holders and bondholders will receive a mix of new notes, equity and cash depending on their seniority. Shareholders will not receive anything for common stock, which will be canceled.
Paul Allen will continue as an investor and retain the largest voting interest in Charter.
The company, which has more than 5.5 million subscribers, said it would make an overdue interest payment of $74 million before a final deadline of February 15.
Charter said that as of February 11 it had more than $800 million in cash on its balance sheet. The company said it believed its liquidity combined with its cash from operating activities would be sufficient to meet its projected cash needs.
(Reporting by Yinka Adegoke)