Updated at 4:08 p.m., Tuesday, May 1, 2007
Hawaiian Telcom to sell directory business for $435M
By Sean Hao
Advertiser Staff Writer
Proceeds of the sale to Englewood-based Local Insight Media LP would be used to pay down debt and for network infrastructure improvements needed to provide new services statewide, Hawaiian Telcom said. The sale is subject to approval by the state Public Utilities Commission.
"This sale allows us to continue to provide quality service to our customers and also to focus on more rapid investments in our core businesses telecommunications services and products," said Michael Ruley, Hawaiian Telcom's chief executive, in a news release. "We aim to be the technology leader in our market."
Hawaiian Telcom had $1.38 billion in long-term debt as of Dec. 31. The company lost $144.6 million last year because of high debt costs and costs associated with turning the company into a standalone phone service. Hawaiian Telcom was created following the $1.6 billion sale of Verizon Hawaii to The Carlyle Group in May 2005.
The sale comes as telephone companies increasingly unload directory operations to focus on telecommunications.
"We believe this transaction is financially sound and positions us well for growth in the future," Ruley said. "Valuations on directory businesses are at an all-time high, and our success in this transaction is a reflection of the quality of the directory business' management and its future growth potential."
The directory will continue to be published as the official telephone book of Hawaiian Telcom. The sale, if approved, would have no impact to the directory businesses' 62 employees or customers, Hawaiian Telcom said.
In 2007, Hawaiian Telcom will publish 10 directories on O'ahu, Maui, Hawai'i and Kaua'i with a total circulation exceeding 1.8 million white and yellow pages books. Hawaiian Telcom said its directory currently ranks number one in the Hawai'i market for possession and usage by consumers.
Local Insight Media publishes print directories and Internet-based local search services in the Greater Cincinnati area, Alaska and the Caribbean.
LM Berry Company is expected to remain printer for the directory.
Hawaiian Telcom said it plans to submit an application for approval of the sale to the PUC within two weeks.
Reach Sean Hao at email@example.com or 525-8093.