Adelphia Trims Sell-off Target2/04/2001 7:00 PM Eastern
NEW YORK-Adelphia Communications Corp. chief financial officer Timothy Rigas said last week the company is considering selling off about 500,000 subscribers in its non-strategic systems, as opposed to the originally believed 900,000 customers.
Rigas said last week at a telecommunications conference here that the company would consider selling 500,000 subscribers to raise between $1.5 billion and $2 billion.
Earlier this year, Adelphia put its roughly 135,000-subscriber Puerto Rico system on the block. At the time, it was expected the other systems would be put up for sale based on the price obtained for the Puerto Rico assets. But now, that may not be the case.
"They're on different tracks," Rigas said. "There is a good chance they could overlap."
At the same time, Adelphia appears to be backing out of a deal to buy 115,000 subscribers from GS Communications Inc. for $750 million in cash. Earlier this month Adelphia filed suit against GS, claiming the company had not met certain deal covenants and asked the court to allow Adelphia to postpone the deal closing.
Rigas would not comment on the still-pending lawsuit, but did say Adelphia would still like to make the transaction.
"We're not trying to get out of the deal," Rigas said. "[The issues] revolve around the closing conditions."
While Rigas said Adelphia has identified about 900,000 subscribers that are in non-strategic markets, they won't all be put up for sale. There is a chance Adelphia won't sell any of those systems.
If those systems were sold, however, proceeds would be used to pay off debt, Rigas said. Including Adelphia's recent stock and bond offering-which raised about $1.5 billion-Rigas said the proceeds from system sales would lower Adelphia's debt-to-cash flow ratio to 6.5 times to 7 times from its current 9.7 times to 9.8 times.
After the debt offering, that ratio would be about 7.25 times, Rigas said.