Home » Competition »Consumer News »Frontier » Currently Reading:

Frontier Communications Bankruptcy Imminent; Company Will Miss March Bond Payments

Phillip Dampier March 10, 2020 Competition, Consumer News, Frontier 2 Comments

A Chapter 11 bankruptcy reorganization of Frontier Communications is imminent, as the company is planning to skip a crucial $320 million debt payment to bondholders on March 15, automatically triggering a 30-day grace period before creditors can demand full payment of Frontier’s debt.

Bloomberg News notes this decision comes as Frontier prepares to file for bankruptcy as early as March 16, with a plan that will reduce its owed debts and turn over control of the phone company to creditors. Frontier has more than $17.5 billion in debt, which is becoming unmanageable for a company that has lost customers month after month for years.

A Frontier bankruptcy would jolt the telecom industry because it would be the largest failure of a telecom company since 2002’s bankruptcy of Worldcom, which used to include MCI.

Sources told the news organization Frontier was holding discussions this week with prospective lenders willing to provide a “debtor-in-possession loan” to the company. That loan would be essential to finance a restructuring of the troubled phone company, backed by giving lenders control over Frontier’s operations.

Multiple groups of bondholders will also be involved in the discussions, including activist shareholder Elliott Management Corp., which most recently pressured AT&T to improve its business model by focusing on its core businesses.

News of Frontier’s plan to miss bond payments caused a dramatic drop in Frontier’s stock price today, which was trading as low as 29 cents a share.

0 0 votes
Article Rating
2 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
David
David
3 years ago

Its about time.. Frontier had been giving away the cash flow as dividends for years instead of investing in the network. They even borrowed several hundred million $$$ a few years ago to pay the dividend even though they lost money! In 2016 then CEO- Dan McCarthy said they would be doing upgrades to the copper plant to allow 50-100 Meg…https://www.fiercetelecom.com/telecom/frontier-to-extend-50-mbps-speeds-to-2m-homes-over-next-year If they had actually done the upgrade, the copper plant would have been in better shape to help avoid some of the outages customers and are currently having. Maybe now they can actually address the network problems with the… Read more »

Michael Gibbons
3 years ago
Reply to  David

it would just be nice if the stupid FRONTIER telephone company would just go out of business once and for all.. THEY ARE JUST ABOUT WORTHLESS. Like you said david,, but what these stupid companies do, they buy out the other party then just let the PROPERTY or whatever it might be go to HELL… (43917) zipcode the area i am from and i got only 1mbps down / 384kbps up for 10 years JUst back in JANUARY 2020 i finally got rid of them once and for all and wnet with tmobile for my internet needs, the fone bill… Read more »

Search This Site:

Contributions:

Recent Comments:

Your Account:

Stop the Cap!