Charter Communications Inc. rolled out the big guns for its first ever
investor day Wednesday, with CEO Carl Vogel pledging to pare down its mounting
$17.6 billion in debt.
With its stock price down about 80 percent since the beginning of the year,
Charter trotted out most of its senior management to address issues including
its capital expenditures, concerns about its plant upgrades and its heavy debt
At the conference, which was broadcast over the Web, Vogel said debt
reduction is one of the MSOs top priorities.
'I plan on reducing debt,' Vogel said. 'I've been here since October, and the
debt is an overhang and a distraction to the management team for all of the
wrong reasons. It's prudent, and I think the market is telling us that we
probably ought to think about reducing debt. We're thinking about reducing
Vogel said Charter's plan to sell nonstrategic systems with between 400,000
and 600,000 subscribers is on track, and there are several interested parties in
the second round of due diligence. He added that the company would consider
selling the systems outright if the right deal came along.
In the MSO's second-quarter conference call in August, Vogel had said Charter
was leaning toward a deal for the systems that would allow the MSO to retain
management control and some ownership of the systems.
Vogel said the structure where Charter would retain management and some
ownership has merit in that it would allow the buyer to take advantage of
programming-cost discounts and efficiencies in billing and oversight.
But if an investor believed it was better suited to run the systems by
itself, 'we're open to that, as well,' he added.
Vulcan Inc. president Bill Savoy provided little additional insight into his
boss, Paul Allen's, plans for Charter.
Last month, Allen -- also Charter's chairman and largest shareholder -- said
in a Securities and Exchange Commission filing that he is considering all of his
options, including taking the company private or purchasing its public debt.
'We have no plans we need to inform the investment community about,' Savoy
But he added that at its current trading levels, the debt and equity markets
are not valuing Charter fairly, and he pointed to the large number of Charter
management and board members -- himself included -- who have purchased Charter
stock and debt recently.
'I personally believe that the debt and equity of Charter is at an attractive
level,' Savoy said. 'The debt presumes that Paul Allen is not a major
shareholder of this company. They have failed to consider the sponsorship this
Vice president of engineering and technology Don Loheide concentrated on the
network, adding that the $3.7 billion that the company spent on plant upgrades
this year was made with expansion in mind.
'The biggest question is: When we're through [with the upgrade], when is the
next round?' Loheide asked. 'Hopefully, we won't have to do that.'
He added that Charter has built in sufficient capacity in the system to
handle the rollout of new services and as bandwidth-hungry services become more
popular, the MSO can reconfigure the network without having to add new
Despite its intentions, the investor day had little effect on Charter's
stock, which closed at $2.95 per share Wednesday, down 3