James Cable Partners is expected to announce a deal to restructure about $118
million in debt Thursday that will transfer most of its equity to its major
bondholder, GoldenTree Asset Management, a New York-based debt fund.
According to sources familiar with the deal, James will swap about $88
million of senior bond debt for equity in the Bloomfield Hills, Mich.-based MSO.
A $30 million bank-credit facility will either be refinanced or reinstated with
new terms, sources said.
In March, James said it had defaulted on $5.4 million in interest payments on
its bond debt, adding that if it didn't restructure, the debt it would be forced
into Chapter 11 bankruptcy.
At the same time, the MSO said that by defaulting on the bond debt, it had
also defaulted on covenants for the $30 million credit facility.
According to a source familiar with the situation, GoldenTree would swap its
bonds for equity, ending up with control of James. Company founder Bill James
would remain to run the operations.
However, it is unclear what will happen to the current holder of the majority
of James equity, New York investment banker Sandler Capital Management.
While in most deals of this type, current equity holders usually end up with
nothing, a source familiar with the situation said Sandler will leave the deal
with at least some stake in the company.
'The old equity is getting something in the restructuring,' said the source,
who asked not to be named.
James has about 65,000 subscribers in mostly rural markets in nine