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Frontier Communications Eyeing A Spring Bankruptcy Filing: Report

Frontier Communications, which has had a struggling balance sheet for the last several years, may be seeking bankruptcy and a company-wide restructuring in order to continue to services customers without interruption, according to a new report.

Embattled telecom provider Frontier Communications has informed creditors of its plans to file for bankruptcy in March 2020, according to a report first published by Bloomberg on Tuesday.

At the same time, the struggling carrier is reportedly considering a restructure more than a month after president and CEO Dan McCarthy stepped down from his post and from the board. Frontier named Bernie Han, Dish Networks' former CFO and COO, as its new CEO and member of the board.

Norwalk, Conn.-based Frontier, which offers telecom services in 29 states, met with creditors and advisers last week to negotiate a "pre-packaged agreement" before $356 million of debt payments come due March 15, Bloomberg said, citing people familiar with the private meeting.

[Related: Frontier Communications Selling Western Wireline Operations For $1.35 Billion]

The report said that Frontier could specifically pursue Chapter 11 bankruptcy, which would allow the provider to continue to operate its telephone and broadband services without interruption for consumers and business users.

Javier Mendoza, vice president of corporate communications and external affairs for Frontier, told CRN in a statement via email that “Frontier’s business and operations are solid and serving our customers remains our top priority. As we have said publicly, Frontier is evaluating its capital structure with an eye to reducing debt so as to be able to better serve our customers. Our customers should expect no changes as we remain focused on providing connectivity services without interruption to our residential customers, institutions and businesses. We are proud to continue to offer well-paying jobs and benefits that contribute to the economic health of the communities we serve.”

Frontier in 2015 acquired Verizon's wireline assets in California, Texas and Florida for $10.54 billion. The purchase also included Verizon's TV, landline phone and broadband internet business aimed at consumers and small-business customers, and impacted about 3.7 million voice customers and 2.2 million broadband connections. But the first week that Verizon wireline customers in California, Florida and Texas were switched over to Frontier proved challenging. The transition prompted widespread service outages across Frontier's then-new markets that lasted about a week.

Frontier announced in May that it was selling its assets and operations in Washington, Oregon, Idaho and Montana for $1.35 billion in an all-cash deal with WaveDivision Capital, a private investment firm focused on the broadband industry, in partnership with Searchlight Capital Partners. The provider said at the time that the deal would help boost its balance sheet.

Frontier has posted weak earnings for the past four years, which the carrier has attributed to "cord-cutting" behavior from its consumer customers.

 

 

 

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