With a raft of financial issues on its back, FairPoint Communications is trying to turn its financial fortunes around by entering into discussions with lenders to restructure its debt. As part of these talks, FairPoint said it has entered into a forbearance agreement with lenders that collectively hold more than 50 percent of the loans and commitments outstanding under the credit facility. In the second quarter, the beleaguered telco reported a $17.8 million loss.
FairPoint's forbearance agreement could mean that the telco could forgo principal interest payments under its credit facility as well as payments under its interest rate swap agreements, totaling about $42.0 million, which are due this Wednesday.
"Today's action by our lenders demonstrates that our discussions are progressing in a positive manner and allows additional time for a permanent restructuring plan to be resolved," said David Hauser, Chairman and CEO of FairPoint, in a release.
FairPoint's financial restructuring has been brought on by ongoing operational issues it has faced with the telephone lines it bought from Verizon Communications in its New England market. The telco, which says it has been improving response times for its residential, business and wholesale customers, recently told a panel of Public Utility Commission officers from Maine, New Hampshire and Vermont that it would have a formal plan at the end of November.
- see the release here
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