US operator Windstream has filed for Chapter 11 bankruptcy protection. The company said it has secured USD 1 billion in financing to take it through the process while it restructures its debt and will continue operations as normal during the court-led process.
The turn to bankruptcy protection follows the company defaulting on debt. The default was triggered by a court ruling against the group that found its spin-off of assets into a real estate trust violated the terms of its debt with bondholders. Windstream said it "strongly disagrees" with the ruling and accused the bondholder Aurelius Credit Management, which brought the case, of "predatory market manipulation to advance its own financial position through credit default swaps".
Windstream CEO Tony Thomas said the chapter 11 proceeding was not due to the company's operational failure and it does not expect a major restructuring of operations. "While it is unfortunate that Aurelius engaged in these tactics to advance its returns at the expense of Windstream, we look forward to working through the financial restructuring process to secure a sustainable capital structure so we can maintain our strong operational performance and continue serving our customers for many years to come," he said.
