FairPoint prepays $25M on its debt
FairPoint Communications (Nasdaq: FRP) on Tuesday reached another financial milestone in its ongoing recovery by making a voluntary $25 million debt prepayment on its $25 million loan.
By making this repayment with cash on hand, the service provider cut what it owes on its term loan from $995 million as of June 30 to $970 million as of the end of August.
"Our continued focus on free cash flow generation gave us the confidence to make this voluntary prepayment," said Ajay Sabherwal, executive vice president and chief financial officer, in a release announcing the prepayment. "We believe reducing debt benefits all our stakeholders and is a key objective for us."
Having put the financial troubles that emerged when it purchased Verizon's (NYSE: VZ) former New England phone lines in 2008 behind them, FairPoint has been making concerted progress to expand its broadband and business service revenue, two elements that are helping to offset ongoing declines in its traditional landline voice business.
In Q2 2012, the service provider added a little over 2,000 broadband subscribers and a total of 15,000 during the past year. Throughout the past year, FairPoint has been installing fiber and necessary electronics such as DSLAMs and Remote Terminal (RT) broadband loop carrier devices to expand its broadband footprint to 19 communities in Vermont in addition to making expansions in its two other New England serving areas, Maine and New Hampshire.
Besides broadband, FairPoint has begun to see the benefits of building out Ethernet services to serve both its business and wireless backhaul wholesale customers. During the quarter, Ethernet services contributed about $10.2 million of revenue in Q2 2012, up from $9 million in Q1 2012 and $2.6 million in Q2 2011.
- see the release
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