If Approved, Sale to Time Warner Cable and Sale of Some Assets to Comcast
Could Proceed Without a Creditor Vote
Adelphia-Comcast Joint Ventures Sale to Close After Confirmation of
Bankruptcy Plan
NEW YORK, May 26 /PRNewswire-FirstCall/ -- Adelphia Communications
Corporation (OTC: ADELQ) intends to seek authority from the United States
Bankruptcy Court for the Southern District of New York to proceed with its
asset sale to a subsidiary of Time Warner Cable and a portion of its asset
sale to Comcast Corporation without first confirming a Chapter 11 Plan of
Reorganization. If the motion is granted, it will increase the likelihood
of the transaction being completed in a timely manner.
Adelphia currently anticipates that a hearing to approve certain
amended bid protections will be held on or about June 8, followed by a
hearing to approve the sale, as well as a Plan of Reorganization related to
Adelphia's joint ventures with Comcast, on or about June 27.
Time Warner Cable and Comcast are working closely with Adelphia to find
the swiftest path to accomplish the sale.
Adelphia's motion was prompted by an ongoing dispute between certain
creditor groups over how to distribute the sale proceeds, which has delayed
resolution of Adelphia's bankruptcy, a prerequisite for closing the asset
sale under the current terms of the deal. Court approval would authorize
limited amendments to the sale agreements that would allow the asset sale
to Time Warner Cable and certain of the assets to be sold to Comcast to
take place without first confirming a Plan of Reorganization for such
assets and without the corresponding creditors' vote.
Adelphia's majority ownership interest in two joint ventures with
Comcast Corporation, Century-TCI and Parnassos, would still be sold to
Comcast concurrently with the consummation of a Plan of Reorganization for
those joint ventures. Other assets being purchased by Comcast would, under
the proposal, be purchased without prior confirmation of a Plan of
Reorganization and without the associated creditors' vote.
The closing of the Comcast and Time Warner Cable acquisitions are
conditioned on one another and are expected to occur simultaneously.
"Despite our best efforts, the creditors' disputes remain unresolved,"
said William Schleyer, chairman and CEO of Adelphia. "Removing the
requirement for a confirmed Plan of Reorganization for Adelphia greatly
increases the odds of Adelphia's sale closing in a timely manner. We
believe these modifications accommodate the desires of creditors to lock in
maximum value for the estate while enabling them to continue settlement
discussions and litigation without the pressure of a looming deadline.
"It has the added benefit of providing greater certainty to our
employees, customers and the local communities we serve who are anxious to
make the transition from a much-improved Adelphia to even stronger
companies in Comcast and Time Warner Cable."
If the modified approach is used, after making distributions to
creditors of the joint ventures pursuant to a Plan, Adelphia would be
comprised of the balance of cash (approximately $12.7 billion, less cash
payments to joint venture creditors) and Time Warner Cable stock
(approximately 16 percent of the common stock of Time Warner Cable) used to
pay for Adelphia's assets. The entities other than the joint ventures would
remain in bankruptcy. The remaining creditors could continue their
negotiations and litigation over how to distribute the value of the
bankruptcy estate.
For Adelphia employees, customers and the communities it serves, the
modifications would have no effect on the well-planned transition related
to operations and job transfers. There will be no change in the ultimate
ownership of the former Adelphia systems; at the conclusion of the
transactions, the ownership of such systems will be the same as
contemplated under the previous plan and the separate agreement between
Time Warner Cable and Comcast.
The modifications Adelphia expects to request include a requirement
that Adelphia sell a portion of Time Warner Cable shares to be received by
Adelphia in an underwritten public offering and a provision that an amount
equal to the already approved breakup fee automatically would be paid or
credited against the purchase price if the sale fails to close by August
31, 2006, under certain circumstances.
There is no assurance that an asset sale or Plan of Reorganization can
be consummated on a timely basis, if at all. An asset sale under Section
363 of the Bankruptcy Code may involve additional transaction-related
costs, which may be substantial.
A copy of the motion filed with the court is available in the investor
relations section of the Adelphia corporate web site http://www.adelphia.com.
About Adelphia
Adelphia Communications Corporation is the fifth-largest cable
television company in the country. It serves customers in 31 states and
offers analog and digital video services, high-speed Internet access and
other advanced services over Adelphia's broadband networks.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements. All statements
regarding the Company's and its subsidiaries' and affiliates' expected
future financial position, results of operations, cash flows, sale of the
Company, settlements with the Securities and Exchange Commission (the
"SEC") and the United States Attorneys' Office for the Southern District of
New York (the "U.S. Attorney"), restructuring and financing plans, expected
emergence from bankruptcy, business strategy, budgets, projected costs,
capital expenditures, network upgrades, products and services, competitive
positions, growth opportunities, plans and objectives of management for
future operations, as well as statements that include words such as
"anticipate," "if," "believe," "plan," "estimate," "expect," "intend,"
"may," "could," "should," "will" and other similar expressions are
forward-looking statements. Such forward- looking statements are inherently
uncertain, and readers must recognize that actual results may differ
materially from the Company's expectations. The Company does not undertake
a duty to update such forward-looking statements. Factors that may cause
actual results to differ materially from those in the forward-looking
statements include whether the proposed sale of the Company's assets to
Time Warner NY Cable LLC ("Time Warner") and Comcast Corporation
("Comcast") is approved and consummated, whether the contemplated
modifications to such sale transactions will be approved and timely
consummated, the potential costs and impacts of the sale transactions
contemplated by the proposed modifications, whether the Company's Modified
Fourth Amended Joint Plan of Reorganization, filed with the United States
Bankruptcy Court for the Southern District of New York (the "Bankruptcy
Court") on April 28, 2006, is confirmed and consummated in time to close
the sale of such assets to Time Warner and Comcast in the event the
contemplated modifications to such sale transactions are not approved and
timely consummated, whether the transactions contemplated by the
settlements with the SEC and the U.S. Attorney and any other agreements
needed to effect those transactions are consummated, the Company's pending
bankruptcy proceeding, results of litigation against the Company, results
and impacts of the proposed sale of the Company's assets, the effects of
government regulation including the actions of local cable franchising
authorities, the availability of financing, actions of the Company's
competitors, pricing and availability of programming, equipment, supplies
and other inputs, the Company's ability to upgrade its broadband network,
technological developments, changes in general economic conditions, and
those discussed under Items 1A, "Risk Factors" in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2005 and
Quarterly Report on Form 10-Q for the period ended March 31, 2006 and in
the Company's supplement to the Fourth Amended Disclosure Statement, filed
with the Bankruptcy Court on April 28, 2006, which is available in the
investor relations section of the Company's website at http://www.adelphia.com.
Information contained on our Internet website is not incorporated by
reference into this press release. Many of these factors are outside of the
Company's control.
SOURCE Adelphia Communications Corporation
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Related links:
http://www.adelphia.com
http://www.prnewswire.com/comp/010150.html/
CONTACT:
Media, Paul Jacobson, +1-303-268-6426, or
Investor Relations, Mark Spiecker, +1-303-268-6545, both of
Adelphia Communications Corporation
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