Telecommunications company Frontier Communications Corp. is telling bondholders that it will shortly present a detailed plan to slash its roughly $17 billion debt load, the Wall Street Journal reported. Frontier has signaled that it wants to start formal negotiations with a single group representing all bondholders. Many investors now expect the company to pursue a comprehensive debt restructuring, a decision that could put it on a path to a chapter 11 bankruptcy filing unless a fractious collection of bondholders can resolve their differences out of court. Whether or not Frontier seeks bankruptcy protection, the company’s pursuit of debt restructuring highlights the problems facing an expansion strategy that took the company from a minor regional player to one that now provides phone and internet service throughout more than half the country. Starting roughly a decade ago, the company embarked on a series of acquisitions, each of which proved difficult to implement. Meanwhile, debt piled up. And the company struggled to hold on to customers in the face of stiff competition from providers of faster internet services. Unusually for a bankruptcy candidate, Frontier still generates free cash flow. It also doesn’t face significant debt maturities until 2022. Still, its business has been shrinking, and there is widespread agreement that it needs to ease its debt burden so it can invest in its infrastructure and have a shot at thriving.
