Frontier Communications, the provider of telecom services in 29 states, is asking creditors to help craft a turnaround deal that includes filing for bankruptcy by the middle of March, according to people with knowledge of the matter.
Company executives including Bernie Han, Frontier’s new chief executive officer, met with creditors and advisers Thursday and told them the company wants to negotiate a pre-packaged agreement before $356 million of debt payments come due March 15, the people said. They asked not to be identified because the meeting was private.
In Washington state, Frontier serves a variety of communities from Everett to Kennewick. In May it announced plans to sell broadband assets serving 350,000 residential and commercial customers in Washington, Oregon, Idaho and Montana for more than $1.35 billion as part of its debt-reduction efforts. That deal was expected to close within a year, after regulatory reviews.
Certain Frontier creditors signed confidentiality documents that restrict their ability to trade in preparation for the restructuring negotiations, the people said.
A representative for Frontier declined to comment. Such deals typically involve a Chapter 11 bankruptcy, which would allow the company to keep operating without interruption of telephone and broadband service to its customers.
A Frontier bankruptcy would rank as one of the biggest telecom reorganizations since Worldcom Inc. in 2002. Frontier has been in talks with advisers about possible solutions to its $17.5 billion debt load, which has become a heavy burden as people stop using land lines.
Creditors have been pushing Frontier for a restructuring plan, and the Norwalk, Connecticut-based company has warned that bankruptcy might be the result.