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Hawaiian Telcom turns to Chapter 11
Hawaiian Telcom has filed for bankruptcy, a move that will not come as much of a surprise to folks who have been following the firm's struggles over the last year. The telco suggested recently that it was looking at bankruptcy as one possible course for dealing with about $1 billion in debt. Hawaiian Telcom last month also missed a $26 million interest payment. The company took on all the debt as part of its $1.6 billion buyout by Carlyle Group a few years ago.
The acquisition has since come to be seen as one of the initial private equity-driven telco buyouts, a trend that continued through this year's debt market crisis. Another deal with big-time private equity involvement--the pending acquisition of Bell Canada Enterprises--appears to be in doubt over financing issues.
The company is 125 years old, founded about two years before the original AT&T. It has about 1,400 employees and 300,000 customers.
For more:
- Forbes has the Associated Press report
Related articles
Carlyle Group has faced heat over the Hawaiian Telcom acquisition
Hawaiian Telcom got a brief boost from selling its directory unit
Comments (3) | Post a comment
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Comments
Posted by Juan Wong Numba | December 2, 2008 - 3:18pm
Carlyle was sold a bill of sales,, well it's more like all rights to the building an interisland toll bridge. What happened to the Carlyle research team ? Hawaiian telephone was probably on a slow downward profit slide. The company lost bids for defense contracts. Modernization was very slow,, Verizone pushed for the changes, but unfortunately the local management clique balked,, slow to respond. Verizone was probably very happy to find a buyer especially during this time Verizone acquired MCI.
Posted by Anonymous | December 2, 2008 - 8:15pm
One has to assume that the same will happen to FairPoint Communications, who bought Northern New England access lines from Verizon just this year.
Posted by ht employee | December 28, 2008 - 3:27am
Verizon, like GTE was a hungry monster that appropriated all profits back to its mainland mothership. Reivestment in plant in Hawaii was a joke. There is plenty of lead cable in the ground still working - much of it placed in the 60's and 70's. Verizon, planning its eventual sale of the company, sold off property and pocketed the cash. One specific example is the Umi street baseyard. Fully owned by the company, it sold for approx. $17 million before Hawaiian Tel was sold to Carlyle.
