FairPoint Communications files for bankruptcy

Bankruptcy

Rural telecom services provider FairPoint Communications Inc filed for Chapter 11 protection in a Manhattan bankruptcy court on Monday, under a pre-arranged plan that would cut its debt by $1.7 billion.

In a statement, the Charlotte, North Carolina-based company said the restructuring plan had the support of lenders holding more than 50 percent of the outstanding debt under its secured credit facility.

FairPoint has also received commitments for a $75 million debtor-in-possession (DIP) loan to continue operations while in bankruptcy.

"The day-to-day operations of our business will not be impacted by today's actions," Chief Executive David Hauser said.

In its Chapter 11 filing, the company listed total assets of about $3.24 billion and debt of about $3.23 billion.

FairPoint added that its annual interest expenses would be reduced from more than $200 million to about $65 million.

With about 1.7 million access line equivalents, FairPoint is the seventh largest local telephone company in the United States.

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