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Bankruptcy Likely ‘Only Way Out’ For Frontier Communications
Frontier Communications, the provider of telecom services in 29 states, reportedly is moving closer to filing chapter 11 bankruptcy as it struggles with a $17.5 billion debt load.
Frontier is asking creditors to help craft a turnaround deal that includes filing for bankruptcy by the middle of March, according to Bloomberg, citing people “with knowledge of the matter.” Company executives including Bernie Han, Frontier’s new CEO, met with creditors and advisers, and told them the company wants to negotiate a prepackaged agreement before $356 million of debt payments come due March 15, it said.
Javier Mendoza, Frontier’s vice president of corporate communications and external affairs, tells Channel Partners his company’s business and operations are “solid and serving our customers remains our top priority.”
Frontier’s Javier Mendoza
“As we have said publicly, Frontier is evaluating its capital structure with an eye to reducing debt and interest expense so as to be able to better serve our customers,” he said. “Our customers should expect no changes as we remain focused on providing quality communications services.”
Mike Sapien, Ovum’s vice president and chief analyst of enterprise services, said Frontier has multiple operations and customer-service issues compounded by large acquisitions from AT&T and Verizon. These acquisitions brought scale issues and new regulatory concerns, he said.
“Given their debt, it seems likely that bankruptcy is the only way out of their current state,” Sapien said. “The March due date seems like to force them into bankruptcy unless they can negotiate something with their large creditors, which is very difficult to manage. Threatening bankruptcy is the only way to get the large creditors to seriously negotiate better terms for Frontier. But there are many moving parts, including managing regulatory pressure from the various state public utility commissions (PUCs). Layer on numerous complaints from customers or outages, or poor service, and this looks like a recipe heading toward bankruptcy for Frontier.”
Ovum’s Mike Sapien
Frontier’s customer service reputation has been “very poor,” and PUCs requiring improvements and additional investments will further strain Frontier’s budget, Sapien said.
“Given their situation, new services and complex business services become almost impossible to support,” he said. “And it seems like in many of their larger markets, they are competing with the cable companies who are doing very well with business services, and also improved their customer service with consumers and business customers.”
For its third quarter, Frontier reported a net loss of $345 million, compared to a loss of $426 million in the year-ago quarter. The losses were primarily due to $276 million in goodwill impairment charges, as well as an additional $30 million loss on the sale of operations in Washington, Oregon, Idaho and Montana to WaveDivision Capital with Searchlight Capital Partners.
What happens to current customers. Do I have to find a new internet service.
Good riddance, this company has poor customer service. But likely to continue as Frontier will likely pass bad data to new buyer.
“As we have said publicly, Frontier is evaluating its capital structure with an eye to reducing debt and interest expense so as to be able to better serve our customers,” he said. “Our customers should expect no changes as we remain focused on providing quality communications services.”
What a joke, just look at all the complaints on line about these territorial bullies! They don’t deserve to exsist
Extremely poor service at Shawano office on Division St. I ended service last year because I was treated rudely while attempting to pay my bill. Shawano Wisconsin
“You can beat Bloomberg’s fake news by Bloomberg system. These Bloomberg reporters probably don’t even use Bloomberg system to search.Only 19.78% shares of the top 100 shareholders have FTR debt at the same time.
It is absolutely impossible for shareholders to vote for a suicide prepackaged bankruptcy.
More than own 0.01% debt of FTR have 155 creditors, they only account for 27.48% of the total debt. (Source from Bloomberg’s system), how can the FTR be sure to get 2/3 creditors to support their restructuring plan in court?
Why does FTR take risk of Ch11 failed & liquidation under sufficient cash and FCF?
Why enter Chapter 11 without completing sale of assets?
Why does FTR take risk of abandon this 1.35B income ?
Is BK possible in March?”
Frontier has been good to me I had to get my number changed and took my internet promotion off they promised me it took them four months to get it line out but they made it right with me you know what nobody perfect. Some people have change to different company but you know what they went back to frontier.
Its amazing , ive been trying to get my phone line replaced for 6 months! They have sent out 3 tech. Different times . Marked my line with spray paint on my land scaping. Sent a subcontracter to do the dirt work then they all dont who and what and when stuff might get done . Still not done. No follow up phone calls . What a joke ! If i could get a hold of one of these colledge educated big shots i would love to give them a peice of my mind. No wonder there having problems. And you no what ? It starts at the top. They need to pit the shovels in the big wigs hands and make them work ans see whats going on down in the trenches. There sitting in there big shot offices and trying to make policies and not getting the picture. I hope they read this and they schould be flat embarressed. .a frontier customer
I’ve had good luck with my service for 2 years now. And customer service has always been good. I do most of my customer service on their chat system.
I have no service interruptions but when I had much more expensive cable (Spectrum), service was always going out.
I have frontier tv, internet and phone.
We have had a lineline with Frontier since they bought out Verizon.
We have had no bad service to date from this company that wasn’t addressed immediately and I would hate to think that they will no longer serve our West Virginia area.
The Verizon company formerly that served our landlines cared nothing about their customers.
Horrible company. Have had numerous problems ever since the took over. The majority of the reps I communicated with to resolve my various problems CLEARLY struggle with their job. Cant switch to Direct TV because I dont use AT&T. Dish does not offer there own Internet. Would end up with Frontier Internet even if I went with Dish.
Frontier has no business doing thisbusiness. Horrible,horrible services
Congratulations on your 17.5 billion in debt load! If you treated other customers like we were treated I can understand them saying goodbye. We have been customer
Since Verizon left. Never missed a payment, credit score of 800. We upgraded our internet service and when we got our first bill it was twice as much as it was suppose to be. We worked out an agreement after 3 months of hassles. Thought everything was fine then they decided to back out of the agreement. Needless to say we told them what they could do with Frontier.
Zipley Fiber bought Frontier Communications where we are at (Snohomish County … north of Seattle). They are even worse than Frontier. Horrible customer service and won’t waive late fees, even though they failed to send a bill. They expect me to remember to pay my bill on time even though they don’t bill me and I find out later that I’m overdue.