ILEC Sandwich Isles Communications wants to play with the big boys and is taking its best shot, trying to buy Hawaiian Telcom out of bankruptcy for $400 million. The private company, based in Honolulu, finally got the go-ahead from a federal bankruptcy judge to propose a different Chapter 11 plan than the one cash-strapped HT had already filed. The HT proposal, filed June 3, essentially would make it a ward of a consortium of banks for $590 million.
Sandwich Isles says it believes it can do a better job putting HT back on its feet than can the banks, a position the banks say just isn't the case since the ILEC itself needs government subsidies to continue serving the rural areas in which it's based.
"They have no money to make an acquisition," said Brian S. Rosen, the banks' attorney. "We know this and we said it on the record." The banks contend the Sandwich Isles bid is a "low-ball offer" that has little merit.
The judge's ruling means Sandwich Isles and any other potential buyers have until Sept. 1 to submit their own plan for HT's reorganization.
Hawaiian Telcom filed for bankruptcy in December after failing to unload the huge debt brought onboard when it was acquired by Carlyle Group in 2005. The company said its liabilities exceeded $1 billion.
For more:
- See this Honolulu Star-Bulletin article
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