Otelco, a local exchange carrier based in Oneonta, AL, filed for bankruptcy protection in Delaware, after losing a contract with Time Warner Cable, which resulted in lower revenue.
According to documents filed in the U.S. Bankruptcy Court, District of Delaware, Otelco’s capital structure includes a senior secured credit facility consisting of an $80 million original term loan, and two additional borrowings totaling $148.9 million and up to $15 million revolving loan commitment.
As of the date of the filing, the documents showed that the debtor currently has outstanding approximately $162 million under the term loan portion of its facilities. GE Capital is shown as administrative agent, agent and lender; GE Capital Markets is shown as lead arranger and sole bookrunner.
Otelco won support of creditors for a debt restructuring plan prior to the filing, the company said. Under the proposal, which must be approved by the bankruptcy court, Otelco will cut its long-term debt by half to $135 million from $271 million with secured creditors swapping current debt for new debt and shares in the company.
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