Sandwich Isles bids $400M for Hawaiian Telcom - San Antonio Business Journal:

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, a company founded in 1995 to take advantag e of government subsidies that pay for the installationb of broadband cable in rural areas, said in a court filing last week that it wantws to buy all of Hawaiiab Telcom’s assets. The company said it woulde retain all ofHawaiian Telcom’s 1,400 workers at their current wages, with the exception of seniod management. Sandwich Isles said in the filingh that its offer would consistof $250 millionb in cash plus $150 million in debt issuefd by Hawaiian Telcom.
A deal with Sandwicn Isles would need the approval of the the Public Utilities Commission and the Federal Communication Hawaiian Telcom said in a statemeng that it stands behind its proposefdreorganization plan, filed in June, to reducde the company’s debt by nearly $790 million, from $1.1 billion to $300 million. Hawaiian Telcom filed a motion seekint an extension to file a Chapte r 11 plan andsolicit votes. Judge Lloyd King extended that periodc toJune 30. The company is seeking anothetr extensionto Sept. 30. Sandwich Isle s has filed an objection to thelatest request.
“In the Sandwich Isles makes numerous allegations about the progreses Hawaiian Telcom has made to date in these Hawaiian Telcom’s decision not to pursue a sale to Sandwichh Isles and the viability of Hawaiian Telcom’s proposexd plan,” Hawaiian Telcom said in a “The company disputes these allegations and intendsd to respond to Sandwich Isles objectiob in the appropriate forum.” Sandwich Isles was foundee by Al Hee, an entrepreneur who saw opportunit in the generous subsidies offered by the federakl government to wire rural and remote communitiess in the mid-1990s.
Working primarily in developments ownee by the state Departmengt of HawaiianHome Lands, Hee’d company has received more than $400 million in loanss from the U.S. Department of Agriculturew since 1998. The cost of wiring the rural developmentsx has been calculated atabout $13,000 per Hawaiian Telcom filed for Chapter 11 bankruptcuy in December. Hawaiian Telcom is owned by , a Washington, D.C.-based private equity group. Carlyle boughrt the assets of Verizon Hawaii in May 2005for $1.6 and began operating independently with its own systemx in April 2006.