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UPDATE 1-Hawaiian Telcom files for bankruptcy protectionSAN FRANCISCO, Dec 02, 2008 (Reuters via COMTEX) -- Hawaiian Telcom Communications Inc filed for Chapter 11 bankruptcy in a Delaware Court on Monday, as the industry faces growing pressure from mobile phones and competition from cable and Internet providers. The Honolulu, Hawaii-based company has been working with creditors on a balance sheet restructuring since October, but concluded that a bankruptcy filing was the best strategy. The company said the move is the result of "increased competition in an ever-evolving communications industry, an inability to satisfy its capital expenditure needs while continuing to meet its debt service requirements," as well as an economic downturn. Hawaiian Telcom had $1.07 billion in long-term debt as of September 30. The Hawaiian company is one of many rural U.S. phone companies struggling with consumers switching to mobile phones and cheaper phone services from cable and Internet companies. A weaker economy has exacerbated the situation. Even the top carriers like AT&T Inc and Verizon Communications Inc have depended on their wireless units for growth in the past few years. Credit default swaps on Hawaiian Telcom's loans may be settled in an Credit default swaps are used to protect against the risk of a borrower defaulting on their debt, or to speculate on their credit quality. When an issuer defaults, protection buyers are paid the full sum insured in return for the default debt, or cash equivalents that are determined by an auction. (Reporting by Jennifer Martinez; Additional reporting by Ritsuko Ando and Karen Brattell; Editing by Richard Chang) ([email protected]; 1 415 677 2547) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. MMMM |