Adelphia Communications Corp. has secured $1.5 billion in
debtor-in-possession financing from a group of lenders, enabling it to complete
its aggressive upgrade plan.
Adelphia had the DIP financing approved by the U.S. Bankruptcy Court for the
Southern District of New York shortly after it filed for Chapter 11 bankruptcy
protection in June.
However, that approval was contingent on the Denver-based MSO establishing
certain debt covenants and submitting a budget before it could actually access
In a press release, Adelphia said its operating and capital budget was
approved by the lenders through June 2004.
The bank group providing the DIP financing is being led by J.P. Morgan Chase
& Co. and Citigroup.
In an interview Wednesday, Adelphia chairman and CEO William Schleyer said
the money will be used to upgrade Adelphia's cable plant. Currently, about 75%
of the MSO's cable plant is rebuilt. Schleyer said that should increase to 95%
by the middle of 2004.
"Now we've got the capital we need to get the plant rebuilt," he added. "Now
what we have to do is focus on how we're going to emerge [from bankruptcy]."
Adelphia has said in the past that it expected to emerge from bankruptcy in
2004. Schleyer said the company is on track to do that.
"I think this company will be ready to emerge financially by the middle of
2004," he added. "Whether or not there are other issues around litigation or
constituent issues that need to be resolved, that remains to be seen. But I
think the company financially will be ready."