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

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, a company founded in 1995 to take advantaged of government subsidies that pay for the installatiob of broadband cable inrurakl areas, said in a court filing last week that it wantsw to buy all of Hawaiian Telcom’sa assets. The company said it would retain all ofHawaiianm Telcom’s 1,400 workers at thei r current wages, with the exception of senioer management. Sandwich Isles said in the filing that its offer woulfd consistof $250 million in cash plus $150 million in debt issue d by Hawaiian Telcom. A deal with Sandwic Isles would need the approvapl ofthe court, the Public Utilitiesw Commission and the Federal Communication Commission.
Hawaiian Telcom said in a statemenf that it stands behind its proposed reorganization filedin June, to reduce the company’ss debt by nearly $790 million, from $1.1 billio n to $300 million. Hawaiian Telcom filed a motion seeking an extension to file a Chapteer 11 plan andsolicit votes. Judge Lloyrd King extended that period toJune 30. The company is seeking another extensionto Sept. 30. Sandwicg Isles has filed an objection to thelatesy request.
“In the objection, Sandwich Isles makes numerous allegations abougt the progress Hawaiian Telcok has made to date in these Hawaiian Telcom’s decision not to pursuee a sale to Sandwich Isles and the viabilityt of Hawaiian Telcom’s proposed plan,” Hawaiiann Telcom said in a statement. “Thre company disputes these allegations and intend to respond to Sandwich Islesa objection in theappropriate forum.” Sandwich Isles was founded by Al Hee, an entrepreneue who saw opportunity in the generous subsidies offereds by the federal government to wire rurakl and remote communities in the mid-1990s.
Workingb primarily in developments owned by the statw Department of HawaiianHome Lands, Hee’s company has received more than $400 millionh in loans from the U.S. Departmenf of Agriculture since 1998. The cost of wiringy the rural developments has been calculated atabout $13,000 per customer. Hawaiian Telco filed for Chapter 11 bankruptcy in Hawaiian Telcom is ownedby , a D.C.-based private equity group. Carlyle boughft the assets of Verizon Hawaii in May 2005for $1.6 and began operating independently with its own systemzs in April 2006.