Charter to miss preferred dividend; seeking additional funds to repay debt maturing after 2006

By Ted A. Knutson

Washington, March 31 - Charter Communications, Inc. said it will not make dividend payments on its preferred stock and added that it is working with financial advisors to find new sources of funds needed to repay debt maturing after 2006.

The St. Louis-based cable operator said it will not make the first quarter dividend payments on its preferred stock because it doesn't have a sufficient surplus, as required by Delaware law.

The move automatically increases the rate of dividend accrual on the preferred securities to 7¾% per year from 5¾%.

Charter said the failure to make the dividend payments is not a violation of credit covenants.

The announcement that it needs new funds was made in the firm's 10-K annual report with the Securities and Exchange Commission while the dividend non-payment was disclosed in an 8-K filing.

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