FairPoint free from bankruptcy spectre

FairPoint Communications announced it has officially exited bankruptcy protection, having reduced its debt during a roughly 15-month process by about 64 percent to more manageable $1 billion.

The company’s announcement comes with three days left in January, making good on the timeline that had been expected after a bankruptcy court judge formally approved FairPoint’s restructuring plan earlier this month. The company filed for bankruptcy in October 2009 with about $2.8 billion in debt, much of taken on during the independent telco’s 2008 acquisition of former Verizon Communications landline properties in New England, and also in the subsequent months as the network cutover was botched and customer satisfaction eroded.

The reorganization plan officially went into effect on Jan. 24. In addition to the debt at exit, FairPoint has a $75 million revolving credit facility available for working capital and general corporate purposes. The company began 2011 on a positive note, not only with the anticipation of exiting bankruptcy after Vermont regulators finally approved its restructuring plan, but also acknowledging that it had met one of its acquisition conditions by making broadband available to at least 83 percent of the New England properties through its new VantagePoint core network.

Under further merger conditions, FairPoint must have broadband availability to 85 percent of those properties by July 2012, and to 87 percent of them by 2013, though individual states may have higher requirements. For example, New Hampshire regulators insisted on 95 percent available of broadband in 2013 as a condition of approving the company’s restructuring plan. At the same time, the company will have to address extreme levels of landline loss rarely, if ever, seen by independent telcos operating in rural areas. The Nashua Telegraph reported that FairPoint lost 40 percent of its landline customers in New Hampshire alone over the last three years.

In a statement announcing the bankruptcy exit, FairPoint also unveiled its new Board of Directors, including Chairman Edward D. Horowitz and board members Todd Arden, Dennis J. Austin, Michael J. Mahoney, Michael K. Robinson, FairPoint CEO Paul H. Sunu, David Treadwell and Wayne Wilson.