Eagle’s Houston fiber network for sale

Eagle Broadband is showing its Houston-area fiber-to-the-home (FTTH) network to prospective buyers this week, having hired a broker to help sell the assets.

“We are actively talking to prospects, and two different prospects will be touring those facilities later this week,” Brian Morrow, Eagle’s chief operating officer, said in an email to Telephony this week. “Basically, it's thirty-something miles of high-quality, multi-strand fiber network with AC enclosures and various electronics connecting six communities in and around parts of Houston.”

Eagle agreed to sell the network to triple-play provider Optical Entertainment Network last spring, but tax battles between OEN and its home state of Texas prevented the deal from closing. OEN instead leased the network in order to deliver services to a few hundred subscribers this year, but the company abruptly announced the discontinuation of all services this month after failing to secure more funding. According to Morrow, OEN didn’t pay Eagle what it owed for using the network, nullifying the lease agreement.

Eagle, meanwhile, filed for Chapter 11 bankruptcy just days before OEN announced it was shutting down. Eagle now operates as a “debtor in possession” firm, so any sale of the Houston fiber network would have to be approved by Eagle’s creditors and a bankruptcy court judge.

“However, if it was a fair price, then it would be to the creditors' advantage,” Morrow said. “And they would have no reason not to OK such a deal.”

Earlier this month, SureWest Communications said it was searching for acquisitions to help it scale its FTTH business, adding that the new assets need not be near the carrier’s California network.

Eagle’s deal with OEN had the latter paying $200,000 in cash and a $1.7-million loan at 9% interest. That deal would have held that, in the event of OEN’s sale or its sale of the fiber assets, OEN would pay Eagle $800,000 in cash.