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Stock News -Fairpoint Communications (NYSE:FRP) files for Chapter 11
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Shares of Fairpoint Communications, Inc. (NYSE:FRP) plunged 30% to $0.30 after FairPoint Communications Inc. said it has agreed on a financial restructuring plan with its lenders. As part of the plan, the company has filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. It has received commitments from certain lenders for a $75 million debtor-in-possession revolving credit facility. Upon emergence from Chapter 11, this facility will convert into a $75.0 million five-year revolving credit facility. The plan also provides for a new $1.0 billion secured term loan. The company's total debt will be reduced to around $1.0 billion from its current level of nearly $2.7 billion. Around $1.1 billion of debt under the company's current credit facility will be converted into equity, transferring 98% of the equity ownership of the company to the secured lenders.
FairPoint Communications, Inc. (FairPoint) is a provider of communications services in rural and small urban communities, offering an array of services, including local and long distance voice, data, video and Internet and broadband product offerings. It operates in 18 states with 1.7 million accesses line equivalents (including voice access lines and high speed data lines, which include digital subscriber lines (DSL), wireless broadband and cable modem) in service as of December 31, 2008.
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