Adelphia Helps Out Its CLEC2/22/2001 3:58 AM Eastern
In an effort to help pay down the debt of its troubled
competitive-local-exchange-carrier subsidiary, Adelphia Communications Corp.
agreed to buy the network and telecommunications assets of Adelphia Business
Solutions Inc. for $88.5 million.
The assets are located in Virginia, Ohio, Colorado and California, and they
are in markets that Adelphia Business, also known as ABIZ, has said it will not
pursue as part of its scaled-down expansion plans.
ABIZ will use the proceeds to pay down debt.
ABIZ, like others in the CLEC sector, has been hit hard by a constrained
capital market and the high cost of building out its network. Late last year,
Adelphia said it would reduce 2001 capital expenditures at ABIZ from $675
million to between $450 million and $500 million.
In a separate transaction, Adelphia said it would purchase rights for an
additional 63 million shares of ABIZ common stock for $461 million. Adelphia
owns about 59 percent of ABIZ's outstanding stock.
Adelphia stock was down 75 cents per share to $43.75 in morning trading. ABIZ
stock was down 56 cents to $5.44.
'We believe that the transaction between ABIZ and Adelphia Communications is
further evidence of the operational and financial integration between the CLEC
and the cable parent, and we continue to view the two companies as one entity,'
UBS Warburg LLC high-yield cable analyst Aryeh Bourkoff said in a report. 'We
expect ABIZ to continue to benefit from the collaboration with