FairPoint officially emerged from chapter 11 bankruptcy on January 24th, ready to begin anew. As is the case in most chapter 11 bankruptcies, common stock shareholders of the former FairPoint saw their holdings become worthless. FairPoint expects to begin trading again on the NASDAQ as FRP.
The storyline for FairPoint has been well documented. Large IOC takes on a million plus Verizon access lines in the Northeast, struggles with debt and integration and ultimately files for bankruptcy. They now hope they’ve turned the corner.
They’re out of bankruptcy, hired a new CEO, and have a new attitude. “The Company believes it is now well positioned for future growth in northern New England after having expanded the availability of high-speed Internet service and making systems and process improvements. The Company also announced that it has completed the VantagePoint core network build in northern New England …,” FairPoint announced in a press release.
The bankruptcy process allowed the company to shed about $1.8 billion in debt, which now stands at about $1 billion. They also secured a $75 million revolving credit line and announced a new board of directors.
The new FairPoint, based in Charlotte, NC, operates in 18 states and has 1.6 million access lines (voice and broadband). They employ slightly over 4,000 people and as of Dec. 31, 2009, had $1.12 billion in revenue.
Have they done enough to succeed?