ST. LOUIS (AP) — Charter Communications Inc., the nation’s fourth-largest cable operator, said Monday its loss for the fourth quarter widened from a year ago and one of its subsidiaries, CCH II LLC, will not make a scheduled interest payment on some of its debt. Charter, which is controlled by Microsoft Corp. co-founder Paul Allen, […]
ST. LOUIS (AP) — Charter Communications Inc., the nation’s fourth-largest cable operator, said Monday its loss for the fourth quarter widened from a year ago and one of its subsidiaries, CCH II LLC, will not make a scheduled interest payment on some of its debt.
Charter, which is controlled by Microsoft Corp. co-founder Paul Allen, plans to file a prepackaged Chapter 11 bankruptcy by April 1. Charter has been skirting insolvency for years, but this time it faces a brutal combination of tight credit and billions of dollars of debt coming due. The St. Louis company hasn’t recorded a profit since it went public in 1999.
For the period ended Dec. 31, Charter said its loss climbed to $1.5 billion, or $3.96 per share, compared with a loss of $468 million, or $1.27 per share, a year earlier.
The company said its most-recent results included a $1.52 billion impairment charge.
Sales grew 6.6 percent to $1.66 billion from $1.55 billion.
Charter attributed the revenue growth to the success of its bundled cable services, saying 53 percent of subscribers have bundles, up from 47 percent a year ago.
“Our success in growing the bundle, even in a challenging economic environment, demonstrates our competitive position in this industry,” Chief Executive Neil Smit said in a statement.
The company has been struggling with debt, however. It said that subsidiary CCH II LLC will not make an interest payment scheduled for Monday on certain senior notes. Charter says it plans to file for Chapter 11 before the end of the 30-day grace period allowed on the payment.
Charter had about $21.7 billion in total debt as of Dec. 31.
Last month, the company said it had reached an agreement in principle with holders of $8 billion in debt who will give up repayment of their debt. In return, they will receive common shares, or warrants for rights to get common shares, that translate to nearly owning the entire company after bankruptcy.
In a prearranged bankruptcy, a company enters into reorganization with a plan to emerge that has the approval of major stakeholders. The rest of the creditors will be dealt with through bankruptcy court. In a prepackaged bankruptcy, each creditor has voted on the plan before the filing.
Charter posted a full-year loss of $2.45 billion, or $6.56 per share, compared with a loss of $1.62 billion, or $4.39 per share, in 2007.
Full-year 2008 sales climbed to $6.48 billion, up 7.9 percent from $6 billion, in 2007.