Hawaiian Telcom files bankruptcy reorganization plan | The Honolulu Advertiser

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Hawaiian Telcom files bankruptcy reorganization plan | The Honolulu Advertiser | Hawaii's Newspaper

Posted on: Thursday, June 4, 2009

Hawaiian Telcom files bankruptcy reorganization plan

Advertiser Staff

Hawaiian Telcom said it is seeking approval to convert up to $1.1 bllion of debt into equity and restructure its loans.

The plan, filed today in U.S. Bankruptcy Court in Honolulu, is supported by a committee representing the company’s secured creditors, Hawaiian Telcom said in a news release. A hearing on the plan has been set for July 23.
“The filing of the plan and disclosure statement is an important achievement in our restructuring efforts,” said Eric K. Yeaman, Hawaiian Telcom’s president and chief executive officer.
“The plan provides for a significantly deleveraged capital structure, and the terms of the new debt give us greater financial flexibility to execute our business plan and invest in new products, better positioning the company for future success.”
Key provisions of the company’s plan include:

Conversion of approximately $590 million of the company’s senior secured credit facility and swap liabilities into the new equity of the reorganized company and a new $300 million senior secured term loan maturing in five years.

Holders of senior notes of approximately $350 million will receive warrants to acquire 12.75 percent of the new equity of the reorganized company and subscription rights to purchase new equity in the amount up to $50 million.

Existing 12.5 percent senior subordinated notes of approximately $150 million and existing common shares will be canceled.

The company anticipates at emergence it will have a $30 million undrawn revolving credit facility and, after distributions pursuant to the plan, at least $45 million of cash on hand.

Cash distributions to holders of allowed general unsecured claims.
Copies of the plan and disclosure statement materials can be found at www.hawaiiantel.com/restructuring.

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