As anticipated, Frontier Communications has filed for Chapter 11 bankruptcy protection in the hopes of slashing about $10 billion of debt and emerging from the process as a company poised for fresh growth.
Frontier announced last night it had filed the restructuring plan with the Southern District of New York. Frontier said it expects to continue providing service without interruption during the process.
The company says the plan will put it on a path to chop debt by more than $10 billion, noting that it has also locked in commitments for $460 million in debtor-in-possession financing. With $700 million of cash-on-hand factored in, Frontier said it enters the process with $1.1 billion in total liquidity.
The telecom said it is moving ahead with the restructuring with approval from more than 75% of its bondholders representing north of the company's $11 billion in outstanding unsecured bonds.
Frontier said it expects to provide service to customers without interruption and "work with its business partners as usual throughout the court-supervised process." It also believes it has enough liquidity to meet ongoing obligations, noting that "trade vendors will be unimpaired for both pre- and post-petition obligations."
Even as it moves to restructure, Frontier confirmed it is pushing ahead with the sale of its Washington, Oregon, Idaho and Montana operations and assets to WaveDivision Capital for $1.3 billion, with an expected close on April 30.
In 2019, Frontier lost 313,000, or 8%, of its residential customers, including a 5% drop in consumer broadband subs, primarily due to its rivals offering more attractive pricing or higher speeds. Frontier also lost 20% of its video sub base (offered through the company's own Fios and Vantage-branded services or through resale of Dish Network satellite TV) in 2019 as customers moved to other providers, including new OTT-delivered video offerings.
For more about the process and Frontier's lack of investment in fiber and network upgrades that helped to put the company in this predicament, please see this story at Light Reading: Frontier files for Chapter 11 with plan to cut debt by more than $10B.
— Jeff Baumgartner, Senior Editor, Light Reading, special to Broadband World News