Adelphia, ML Media agree to sell Puerto Rico cable operations for $520 million

By Caroline Salls

Pittsburgh, June 6 - Adelphia Communications Corp. and ML Media Partners, LP have agreed to sell their jointly owned San Juan, Puerto Rico, area cable operations for $520 million, according to an 8-K filing with the Securities and Exchange Commission.

The buyer is a new company formed by MidOcean Partners and Crestview Partners.

The price, which is subject to customary purchase price adjustments, equates to a $3,800 per subscriber valuation.

"We are extremely pleased to enter into this agreement with MidOcean and Crestview, who have a proven ability for employing their skills in concert with management teams at their portfolio companies to build stronger businesses," Adelphia chairman and chief executive officer Bill Schleyer said in the filing.

"They have the necessary cable sector expertise to provide our customers in Puerto Rico with opportunities for continued service improvements and the launch of advanced services through an upgraded cable system."

Since Sept. 30, 2002, the joint venture between Adelphia and ML Media Partners that owns and operates the Puerto Rico systems has been under Chapter 11 bankruptcy protection, separately administered from the larger Chapter 11 bankruptcy of Adelphia Communications.

The Puerto Rico joint venture was not included in the previously announced asset sale of Adelphia Communications Corp. to Comcast Corp. and Time Warner Inc.

The transaction is subject to approval by the U.S. Bankruptcy Court for the Southern District of New York, regulatory approvals, financing by the buying group and other customary closing conditions.

Closing is expected to occur sometime in the fourth quarter of this year.

Until the deal is completed, Adelphia will continue to manage daily operations in San Juan.

Lazard acted as financial adviser to Adelphia. Daniels & Associates acted as financial adviser to ML Media Partners. DH Capital acted as financial adviser for MidOcean.

Citigroup and JP Morgan are providing the debt financing.

Century/ML Cable Venture is a joint venture that is owned 50% by Century Communications Corp., a wholly owned, indirect subsidiary of Adelphia Communications Corp., and 50% by ML Media Partners, LP.

Adelphia and ML Media will file a motion in its Chapter 11 case seeking court approval of a break-up fee and expense reimbursement, the extension of exclusivity in favor of the buyers until the earlier of the ruling on the break-up fee and expense reimbursement motion and 60 days from the filing of the break-up fee and expense reimbursement motion and an extension of the terms of the previously filed expense reimbursement letter.

Adelphia, a Greenwood Village, Colo., cable television operator, filed for bankruptcy on June 25, 2002. Its Chapter 11 case number is 02-41729.

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