January 15, 2009 / 5:28 PM / 10 years ago

UPDATE 1-Charter misses $74 mln in debt interest payments

NEW YORK, Jan 15 (Reuters) - Charter Communications (CHTR.O), the fourth largest U.S. cable operator, said on Thursday it missed interest payments of $73.7 million as it continues to negotiate a debt restructuring with bondholders.

The company said it has until Feb. 15 to make the payment and avoid default, which could push it into bankruptcy.

Charter, controlled by Microsoft Corp co-founder Paul Allen, said last month it had engaged Lazard LLC to initiate negotiations with bondholders as a means of increasing its financial flexibility.

Charter has the cash to meet the payments, but it is likely negotiating with bondholders for an extension on debt maturities and possibly for lower interest payment rates, said David Joyce, an analyst at Miller Tabak.

“They can afford to make the interest payments, but these notes are likely included in the ongoing negotiations,” Joyce said.

Lazard declined to comment on discussions with Charter.

Charter, which has more than 5.5 million subscribers to its video, Internet and phone services, is highly leveraged with over $21 billion of debt on its balance sheet as of Sept. 30, compared with a current market capitalization of around $57 million.

“We’ve made significant progress over the last several years with regard to operation improvements, and we hope to make similar progress with regard to our capital structure,” Charter Chief Executive Neil Smit said in a statement.

Though analysts believe Charter can meet its interest payments at least until its next major principal payment of $1.9 billion is due in Sept. 2010, there are concerns that the ongoing credit crisis could force the company’s hand before then. (Reporting by Yinka Adegoke and Caroline Humer; Editing by Toni Reinhold)

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