Frontier — the only landline and Internet provider for the bulk of Hampshire County — is contemplating bankruptcy.
Stopthecap.com says that under a “stifling” debt of $17.5 billion, “Frontier Communications warned investors it may be forced to declare bankruptcy reorganization to protect its assets from creditors that are growing impatient with the phone company.”
The move could come in the 1st months of 2020 along with a reorganization that will sweep out its top management, including CEO Dan McCarthy, who has seen Frontier’s share price spiral downwards and customers leave in large number since he took the helm in 2015.
More than 71,000 Frontier customers disconnected service in the 3rd quarter of 2019 alone, the biggest percentage of customer losses of any major residential telecom company in the United States.
While other telephone companies have worked to hold onto customers by upgrading broadband services, Frontier has done little with areas served by copper lines — like Hampshire County.
Last year, nearly 90 customers east of Springfield had no service for nearly 2 months. And beginning last fall, landline service to the Hampshire 911 center on Jersey Mountain Road has been out at least a half dozen times, prompting the Sheriff’s Office to complain to the Public Service Commission.
The last time Frontier posted an annual profit was 2014, with cumulative net losses topping $8 billion, including more than $5 billion this year. Still, the Connecticut-based company reported $786 million of liquidity and operating free cash flow of $300 million as of June 30.
When 3rd-quarter results were announced earlier this month, revenue fell another 6.1 percent and a measure of adjusted earnings was down 8.4 percent. Both declines were larger than analysts expected.
Frontier has $333 million of interest due on its unsecured bonds and first-lien debt on March 15, and another $381 million in April, Bloomberg calculates.
Frontier has drawn out most of its available credit — a move often taken by companies about to file Chapter 11 bankruptcy — and has enough cash to keep going until 2022, when $2.7 billion of unsecured bonds mature.
Frontier’s financial woes spurred the company to sell its operations in Washington, Oregon, Idaho and Montana earlier this year. Other asset sales could follow.
A bankruptcy filing would allow Frontier to renegotiate its debts and labor agreements. Layoffs and restructuring cost-cutting would likely follow.