Allen's Grip On Charter Loosens
Reorganization Will Reduce Chairman's Voting Control To 35%
Mike Farrell -- Multichannel News, 2/17/2009 10:21:24 AM MT
Charter Communications chairman Paul Allen's voting grip on the St. Louis-based MSO will be loosened considerably once the troubled cable operator files for bankruptcy protection, according to documents filed with the Securities and Exchange Commission late Friday.
Allen, who has reportedly invested more than $7 billion of his own money in Charter since 1998, currently owns 52% of the cable company's equity and 91% of its voting shares, according to its last proxy statement filed in March. And while it was largely expected that his controlling interest in the company would be reduced after it completes a planned debt-for-equity swap, the company had stressed that he would retain the largest voting interest in the company.According to the SEC documents, Allen's voting interest will fall to 35%, although the chairman will be able to elect the same percentage of the company's board of directors.
Allen's equity position in the company will be a bit trickier. According to the document, Allen's current 52% equity stake will be wiped out after the bankruptcy -- along with everyone else's -- and be replaced with new stock.
The SEC documents indicated that Allen and entities of Allen will receive about 2% of Charter's new Class B super-voting shares and warrants for up to 4% of Charter's new Class A common equity. In addition, Allen will receive $175 million in cash, $85 million in Charter debt and $20 million in reimbursement for restructuring fees.
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