UPDATE 1-FairPoint says begins debt exchange offer
June 24 (Reuters) - FairPoint Communications Inc FRP.N began a private exchange offer for all of its 13.125 percent senior notes due 2018, in a bid to save on cash interest expenses and to remain in compliance with the terms of its senior secured credit facility.
The rural telecom services provider said it has not been able to fully execute its 2009 operating plan due to issues following the transition to its new billing system and its revenue has continued to decline.
Lower cash collections were putting further stress on liquidity, it added.
Should these factors persist, the company may default on interest payments due Oct. 1 on the notes, the company said.
In March, FairPoint suspended its quarterly dividend and said its transition to a new billing platform could hurt liquidity in the first half of 2009.
A minimum of 95 percent of the aggregate principal amount of the outstanding notes must be tendered for exchange before the expiration date of July 22 to consummate the offer, it said. (Reporting by Bijoy Koyitty in Bangalore; Editing by Ratul Ray Chaudhuri)
