Yet Another Extension for RCN4/01/2004 8:39 AM Eastern
RCN Corp. said Thursday that talks with its senior secured lenders and others on a consensual financial restructuring have been extended until 11:59 p.m. May 3. The deadline had been Thursday.
RCN had said in a statement Feb. 14 that it would not make interest payments on its 10.125% senior notes, which could have triggered defaults on all of its debt -- about $1.1 billion in bond obligations and $520 million in bank facilities.
But the company reached a forbearance agreement with lenders and bondholders, who agreed not to declare an event of default until at least March 1. That date was pushed to March 15, then April 1 and, now, May 3.
The interest payment on the 10.125% notes was due Jan. 15 and, at that time, RCN said it was negotiating with bondholders concerning payment -- a move that many observers saw as a tactic to get bondholders to accept a debt-for-equity swap.
The operator has said that it expects any financial restructuring to be implemented through a reorganization under Chapter 11.
It has set up a Web site (rcntomorrow.com) to provide updates on its restructuring process.