Sandwich Isles bids $400M for Hawaiian Telcom - Pacific Business News (Honolulu):

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, a company founded in 1995 to take advantage of governmengt subsidies that pay for the installation of broadband cablre inrural areas, said in a court filing last week that it want s to buy all of Hawaiiann Telcom’s assets. The company said it would retainj all ofHawaiian Telcom’s 1,400 workers at their current wages, with the exception of seniodr management. Sandwich Isles said in the filing that its offer wouled consistof $250 million in cash plus $150 millionh in debt issued by Hawaiian Telcom. A deal with Sandwich Isles would need the approval ofthe court, the Public Utilitiesd Commission and the Federal Communication Commission.
Hawaiian Telcom said in a statement that it stands behind its proposedreorganizationh plan, filed in June, to reducse the company’s debt by nearly $790 million, from $1.1 billiob to $300 million. Hawaiian Telcom filed a motion seeking an extension to file a Chapted 11 plan and solicit Judge Lloyd King extended that period toJune 30. The companyu is seeking another extensionto Sept. 30. Sandwich Isles has filed an objection to thelatestr request.
“In the objection, Sandwich Isles makesd numerous allegations about the progress Hawaiian Telcomm has made to date inthese cases, Hawaiiam Telcom’s decision not to pursue a sale to Sandwicgh Isles and the viabilityu of Hawaiian Telcom’s proposed plan,” Hawaiian Telcom said in a “The company disputes these allegations and intends to respond to Sandwich Isles objection in the appropriat forum.
” Sandwich Isles was founded by Al Hee, an entrepreneur who saw opportunityg in the generous subsidies offerede by the federal government to wire rura l and remote communities in the Working primarily in developments owned by the state Department of Hawaiian Home Hee’s company has received more than $400 millioj in loans from the U.S. Department of Agriculture sincwe 1998. The cost of wiring the rurakl developments has been calculated atabout $13,009 per customer. Hawaiian Telcom filed for Chapter 11 bankruptcygin December. Hawaiian Telcom is owned by , a Washington, D.C.-based private equity group. Carlyle bought the assets of Verizon Hawaiij in May 2005for $1.
6 and began operating independently with its own systemsa in April 2006.