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PARKERSBURG -- In an effort to reduce company debt by $10 billion, Frontier Communications voluntarily declared bankruptcy under Chapter 11 code, according to a press release.
The Public Service Commission of West Virginia issued a detailed statement on how it will affect customers.
"Frontier emphasized to the commission that it is not going out of business, but in fact was taking these steps to position the company for long term success," the statement said.
The statement also said the restructuring will not affect customer rates or the terms of service.
"All Frontier customers need to know that the bankruptcy filing will not affect their service. The commission will be closely monitoring this proceeding to ensure that West Virginians will not see any disruption of service," commission Chairman Charlotte Lane said.
They are entering a Restructuring Support Agreement to re-work finances that is hoped to "provide significant financial flexibility to support continued investment in its long term growth," the release said.
Through this process, Frontier expects to be able to continue to offer service without interruption.
With this new plan, Robert Schriesheim, Chairman of the Finance Committee of the Board of Directors, said the company will have the flexibility to restructure to enhance services offered for customers while optimizing the most value for shareholders.
In order to make this plan possible, Frontier has commitments for $460 million in debtor in possession financing. With the debtor in possession financing and over $700 million in cash, with court approval, the company's liquidity will total over $1.1 billion, the release said.
"This liquidity, combined with cash flow generated by the Company's ongoing operations, is expected to be available and sufficient to meet Frontier's operational and restructuring needs," the release said.
Along with the Chapter 11 filing, Frontier will file motions through the Bankruptcy Court.
"These motions will allow the Company to continue to operate in the normal course of business without interruption or disruption to its relationships with its customers, vendors and employees," the release said.
Frontier has a webpage dedicated to providing more information on the restructuring at http://frontierrestructuring.com.