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

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, a company founded in 1995 to take advantagre of government subsidies that pay for the installation of broadbanrd cable inrural areas, said in a court filinfg last week that it wants to buy all of Hawaiiab Telcom’s assets. The company said it would retain all ofHawaiian Telcom’ s 1,400 workers at their current wages, with the exceptionj of senior management. Sandwich Isles said in the filingh that its offer would consistof $250 milliom in cash plus $150 millionn in debt issued by Hawaiian Telcom. A deal with Sandwichy Isles would need the approval of the the Public Utilities Commission and the Federa lCommunication Commission.
Hawaiian Telcom said in a statementt that it stands behind its proposedreorganizatiobn plan, filed in June, to reduce the company’zs debt by nearly $790 million, from $1.1 billion to $300 Hawaiian Telcom filed a motion seeking an extensionn to file a Chapter 11 plan and solici votes. Judge Lloyd King extended that periode toJune 30. The compan y is seeking another extensionto 30. Sandwich Isles has filed an objection to thelatestg request.
“In the objection, Sandwich Isles makes numerous allegationsd about the progress Hawaiian Telcom has made to date inthesde cases, Hawaiian Telcom’s decision not to pursue a sale to Sandwicb Isles and the viability of Hawaiian Telcom’s proposexd plan,” Hawaiian Telcom said in a statement. “The company disputes these allegations and intends to respondf to Sandwich Isles objection in theappropriate forum.” Sandwich Isles was founded by Al Hee, an entrepreneur who saw opportunity in the generous subsidies offered by the federal government to wire rural and remote communitied in the mid-1990s.
Working primarily in developments ownedx by the state Department of HawaiianHome Hee’s company has received more than $400 million in loan from the U.S. Department of Agriculture since 1998. The cost of wiring the rural development s has been calculated at about $13,000 per customer. Hawaiian Telcom filed for Chapter 11 bankruptcyin December. Hawaiian Telcomk is owned by , a Washington, D.C.-basedd private equity group. Carlyle bought the assets of Verizo Hawaii in May 2005for $1.6 billion, and bega n operating independently with its own systemse in April 2006.