3 Dec 2008

Hawaiian Telecom Communications Incorporated files for bankruptcy

11:47 am on 3 December 2008

Hawaiian Telecom Communications Incorporated has filed for bankruptcy after increased competition and an economic downturn prevented it from reaching an agreement with creditors over 25.6 million US dollars in interest payments.

The Honolulu Star Bulletin reports the company, which has been working on a balance sheet restructuring since October, and seven affiliates filed petitions in U.S. Bankruptcy Court listing 1.4 billion dollars in assets and 1.3 billion in debts.

The company said its $75 million cash on hand gives it "sufficient liquidity" to support operating expenses in the near future.

Subject to court approval the cash will fund wages for its 1,474 employees, customer programs, payments to vendors and suppliers, and overall operations.

Hawaiian Telecom has lost more than $235 million since Washington D.C based private-equity firm Carlyle Group acquired Verizon Communication Inc.'s Hawaii assets for $1.6 billion in 2005.

The Honolulu-based telecommunications company has struggled with continued land-line subscriber losses and heavy discounting from competitors.