Optimum Communications is nearing a restructuring agreement with its lenders that would hand creditors control of the telecoms provider and could resolve litigation while leaving the controlling shareholder Patrick Drahi with a stake worth far less than the $3bn he had been asking, according to sources.
The gap between Drahi and lenders was initially wide but had been narrowing steadily, and currently appears his ask of some portion of $750m left for preferred and common equity holders is palatable to a quorum of creditors, sources also said.
Lenders went restricted in August under a nondisclosure agreement. Discussions with Drahi included a possible $750m equity allocation for existing shareholders. Current discussions are above that amount, but one member of the lenders’ steering committee is holding out, one of the sources said.
The potential deal follows a September lawsuit in New York state court by lenders to CSC Holdings, including Apollo, Arini, GoldenTree and Oaktree. The creditors accused Optimum, controlling shareholder Patrick Drahi and other insiders of using a series of transactions to move valuable assets beyond lenders’ reach. 9fin previously detailed the allegations.
The Wall Street Journalreported that the proposed restructuring would give equity to...
