Frontier Communications is in talks with advisors about its debt of USD 17.5 billion, Bloomberg reported, with sources saying creditors want Frontier to restructure and come out with a plan. This could include the company declaring itself bankrupt, a move which could take place in the first quarter of next year, before USD 300 million worth of interest becomes due in March, sources said. Some investors have argued that it would be better for the company to file for Chaper 11 sooner rather than later. The major restructuration plan would also include new management and a new CEO. Sources say Frontier has started looking for a possible replacement to Dan McCarthy, who has the company’s CEO since 2015.
Telecom consulting firm Altman Vilandrie & Co has been hired by creditors to conduct due diligence on Frontier, including the development of a post-reorganization business plan. A group of creditors including Elliott Management and Franklin Resources holds nearly 50 percent of the company’s bonds. Another group of creditors includes GoldenTree Asset Management. Frontier has warned that it may have to file for court protection from its creditors.
A restructuring of Frontier’s debt load in bankruptcy would rank among the biggest telecom reorganizations since Worldcom in 2002, according to data compiled by Bloomberg.
