It's unlikely anyone envisioned the outcome to be this bad when FairPoint crafted a deal to purchase Verizon's New England telephone lines, but now the company is facing possible bankruptcy. And with bankruptcy proceedings knocking at FairPoint's door, a report in the New York Post emerged that in addition to some large distressed asset traders, fellow ILEC Windstream is considering a bid to buy the beleaguered company. FairPoint has had a tough year trying to resolve ongoing residential and wholesale customer issues from the telephone lines it purchased from Verizon in Maine, New Hampshire and Vermont. To date, FairPoint has more than $2 billion in debt and is unable to make its interest payments.
Last week, FairPoint said that lenders that hold half its debt load will wait until Oct. 30 to collect from the ILEC. FairPoint is also negotiating with its bondholders on how the business will be repossessed. However, if FairPoint can't come to terms with its bondholders and lenders, it's likely the ILEC will enter bankruptcy.
Unlike its other fellow tier 2 ILEC compatriots Frontier and CenturyTel, which bought Verizon's rural lines and the former EMBARQ, Windstream has not made any major acquisition. Instead, the service provider has been making much smaller strategic acquisitions of smaller phone companies such as D&E Communications and Lexcom. But if Windstream does make a successful bid for FairPoint, it will in a single stroke become one of the U.S.' largest telephone companies. Of course, any deal for the troubled FairPoint would likely come under greater scrutiny.
- New York Post has this article
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