As the Utah Public Service Commission investigates Frontier Communications of Utah over complaints out of Castle Valley and the nearby area that the company has failed to provide reliable service to customers, talk about the national corporation’s financial stability indicate it is selling major assets and operations to meet its debts.
The Wall Street Journal reported in September that many Frontier Communications Corp. investors expected the company to pursue a comprehensive debt restructuring, possibly meaning a Chapter 11 bankruptcy filing, and Bloomberg reported in November that it was seeking a new CEO to head up its efforts to restructure its debts.
The corporation faces debt maturities this year in the amount of $245 million, but its most significant debts will be owed in 2022, in the amount of $2.7 billion.
According to the Everett Herald, a newspaper published in the State of Washington, Frontier is nearing finalization of a $1.35 billion sale of its northwest assets and operations in Idaho, Washington, Oregon and Montana that would generate funds to help address these debts.
The sale, according to fiscal analyst Gary Chodes with the investing website Seeking Alpha, leaves Frontier with “a hodge-podge of mostly rural telecommunication assets spread across 25 states that are expensive to maintain.”
Stockholders in Frontier have also indicated a clear lack of confidence in the corporation over the past 10 years. Its stock (FTR) price has dropped over 99% since then, and amid talk of possible bankruptcy, financial analysts give the stock a solid “sell” rating.
As for Frontier’s Utah operations, according to Julie Price, a spokesperson for Utah’s Division of Public Utilities, the territory Frontier covers makes it “well-suited” to allow customers in rural Utah to receive “robust and reliable service” while offering “reasonable investor profits” to stockholders of the company.
“Our understanding is that Frontier’s Utah operations have been profitable and we expect operations would be largely unaffected [by a Frontier bankruptcy],” Price said.
Price added that the company “should remain in operation” and that “specific permissions are required” before Frontier can cease service. “However,” she said, the division’s “ongoing concerns with the company’s level of investment in Utah would certainly remain.”
This story has been updated.