Hawaiian Telcom Communications plan of reorganization confirmed

By Caroline Salls

Pittsburgh, Nov. 16 - Hawaiian Telcom Communications, Inc.'s plan of reorganization has been confirmed by the U.S. Bankruptcy Court for the District of Hawaii, according to a company news release.

Hawaiian Telcom said its confirmed plan will reduce its debt to $300 million from $1.15 billion, allowing for greater financial flexibility so that it can execute its business plan and better compete in the marketplace.

"We are extremely pleased with the court's decision today and look forward to working through the regulatory process so our confirmed plan can become effective and the company can emerge from bankruptcy a stronger and more financially secure company better able to compete in the ever-changing communications industry," president and chief executive officer Eric K. Yeaman said in the release.

Under the plan:

• About $590 million of the company's senior secured credit facility and swap liabilities will be converted into new equity of the reorganized company and a new $300 million five-year senior secured term loan;

• Holders of $350 million in senior notes will receive warrants to acquire 12.75% of the new equity of the reorganized company and subscription rights to purchase up to $50 million of new equity;

• Holders of general unsecured claims will receive their share of a cash distribution; and

• Existing 12½% senior subordinated notes and existing common shares will be cancelled.

Hawaiian Telcom, Inc., a Honolulu-based telecommunications provider, filed for bankruptcy on Dec. 1, 2008 in the U.S. Bankruptcy Court for the District of Delaware. The case was later transferred to Hawaii. The company's Chapter 11 case number is 08-02005.

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