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Bondholders of cable firm Charter may be near equity deal

Oaktree Capital Management, Franklin Resources and Apollo Management may swap their debt as part of the company's reorganization.

March 25, 2009|Bloomberg News

Charter Communications Inc. bondholders Oaktree Capital Management, Franklin Resources Inc. and Apollo Management are close to a deal to swap their debt for equity as part of the cable operator's reorganization, according to three people familiar with the matter.

The firms, which would receive minority stakes in the St. Louis company, are among Charter's largest bondholders. Charter said last month that it would file for Chapter 11 bankruptcy protection by April 1.

Chapter 11 can be a contentious, drawn-out and expensive process, particularly if major creditor groups don't agree with a company's debt-restructuring plans when it enters bankruptcy. An agreement with Apollo, Franklin and Oaktree would mean Charter's plans are supported by a group of its largest senior bondholders and make it easier for the company to exit bankruptcy quickly, said one of the people.

Billionaire Paul Allen, Charter's chairman and co-founder of Microsoft Corp., would retain voting control in the cable operator, according to one of the people.

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