NEW YORK — Financially strapped cable company Charter Communications Inc. is in talks to give a large ownership stake to one of its biggest debt holders, Apollo Management, The Associated Press has learned.
Apollo, a private-equity firm, would have minority voting rights but would leave Charter Chairman Paul Allen with control of the company, a person knowledgeable about the situation said today, confirming earlier published reports. This person spoke on condition of anonymity because the discussions have yet to be officially disclosed.
Charter spokeswoman Anita Lamont did not confirm the talks, but noted that previous regulatory filings have said Allen will keep a 35 percent voting interest in the St. Louis-based company after it files for a prearranged Chapter 11 bankruptcy by April 1.
In a prearranged bankruptcy, a company’s restructuring plan already has the approval of major stakeholders. The rest of the creditors will be dealt with through bankruptcy court.
Charter, the nation’s fourth-largest cable TV operator, hasn’t recorded a profit since it went public in 1999. It has been skirting insolvency for years, but this time it faces a combination of tight credit and billions of dollars of debt coming due. Allen, the co-founder of Microsoft Corp., has lost about $7 billion on his investment in Charter.
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