Under any restructuring plan by Charter, its principal investor, the billionaire Paul G. Allen, will retain control of the company. When the company files for bankruptcy, it will be among the largest to do so this year.
Many bankruptcy experts have said that the bankruptcy boom will lend itself to attractive merger activity as investors swoop in to acquire companies or equity stakes through their debt. For private equity firms, making acquisitions through a company’s debt might prove even cheaper than buying its equity outright.
Analysts have said that while Charter is a sound company in a fairly resilient industry, its debt load proved crippling, and it has exhausted the patience of its creditors. The company was cobbled together through a series of acquisitions over the years, but the debt load it assumed proved too much to bear this year.
When it announced that it had reached a prearranged bankruptcy plan last month, Charter said that it had an agreement in principle with its bondholders in which the company would raise about $3 billion by refinancing existing debt and getting new capital
