Charter Communications, the cable TV company owned by Microsoft co-founder Paul Allen, said Thursday that it plans to file for bankruptcy as part of an agreement to reduce its debt by 8 billion dollars, dpa reported.
The company was bought in 1998 by Allen who took on over 20 billion dollars in debt to build it into the fourth largest cable company in the US with 5.5 million customers.
But it suffered from competition with satellite TV companies and from a cable system that lagged technologically behind those of its rivals and failed to record a profit since going public in 1999.
Under the restructuring agreement the holders of some 8 billion dollars in debt will forego repayment in return for common shares that will give them almost the entire company after bankruptcy.
Billionare Allen, 55, who invested over 7 billion dollars in Charter, his biggest investment since leaving Microsoft in 1983, will lose his 51-per-cent majority stake in the company. But he will remain the company's largest stockholder. He also will retain voting control under the agreement with the debt holders.
In September, Forbes ranked Allen twelfth on its list of its richest Americans with a new worth of 16 billion dollars. In addition to his stake in Charter, he also owns a large stake in DreamWorks Animation SKG, liquor giant Digeo, and numerous holdings in real estate, technology, media, and content companies.
Allen also owns three professional sports teams: the Seattle Seahawks of the National Football League, the Portland Trail Blazers of the National Basketball Association, and the Seattle Sounders FC franchise in Major League Soccer.