Shares of rural telecom FairPoint Communications Inc. (NYSE:FRP) dropped about 18% to 55 cents during the afternoon Thursday after news of continued post-merger troubles and debt issues.
FairPoint said after market close on Wednesday that it might not be able to make an Oct. 1 interest payment. The company is also launching an exchange offer for notes to reduce its interest expense and help it comply with debt covenants.
The company hired Rothschild to advise it on its recapitalization efforts.
FairPoint bought landline units in Maine, New Hampshire and Vermont from Verizon Communications Inc. (NYSE:VZ) in 2008 for $2.4 billion. The businesses have struggled since switching from Verizon's systems, and FairPoint says the difficult transition has prevented it from completing its 2009 operating plans. (Subscribers to The Deal Pipeline may read more
here.)
Hawaiian Telcom Communications Inc., which Carlyle Group bought from Verizon for $1.6 billion in 2005, also had systems problems. The Honolulu telecom sought bankruptcy protection in December. (Subscribers to The Deal Pipeline can read more about Hawaiian Telecom
here.) -
Chris Nolter
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