Charter Communications said Thursday that it plans to file for financial protection as the company seeks to reduce its debt by $8 billion. The restructuring of the firm's financials, planned to take place by April 1, also calls for Paul Allen, the co-founder of Microsoft, to hold the largest voting percentage in Charter.
The company has been teetering on the brink of financial trouble for weeks, and the formal Chapter 11 Bankruptcy announcement didn't come as a surprise.
At the same time, Charter released a rosy fourth-quarter 2008 report indicating its underlying business remains healthy. "We are pleased with our operational results during the fourth quarter, particularly in this challenging economic environment," said Neil Smit, Charter's president and CEO, in a statement. "We remain committed to delivering value to our customers through our bundle of quality video, high-speed Internet, and telephone services." Smit added that Charter is rolling out several new service improvements.
Earlier this year, ratings agencies signaled there were debt problems facing Charter. The planned restructuring should relieve the financial pressure on Charter, and the company said that the $800 million in cash and cash equivalents available to it should be enough to ride out the restructuring.
In a release, Charter said the company "believes its liquidity, combined with its cash from operating activities, will be sufficient to meet its projected cash needs, including the payment of normal operating costs and expenses, as it proceeds with its financial restructuring."