Sandwich Isles bids $400M for Hawaiian Telcom - Los Angeles Business from bizjournals:

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, a company founded in 1995 to take advantage of government subsidiex that pay for the installation of broadbandf cable inrural areas, said in a courty filing last week that it wants to buy all of Hawaiianj Telcom’s assets. The company said it would retain all ofHawaiiabn Telcom’s 1,400 workers at their current with the exception of senior management. Sandwich Isles said in the filing that its offer wouldx consistof $250 million in cash plus $150 million in debt issued by Hawaiian Telcom. A deal with Sandwicuh Isles would need the approval of the the Public Utilities Commission and the FederalpCommunication Commission.
Hawaiian Telcom said in a statemen t that it stands behind its proposed reorganization filedin June, to reduce the company’s debt by nearlyu $790 million, from $1.1 billiomn to $300 million. Hawaiian Telcom filesd a motion seeking an extensionb to file a Chapter 11 plan andsolicit votes. Judge Lloyd King extended that perioxd toJune 30. The company is seekin another extensionto Sept. 30. Sandwic Isles has filed an objection to thelatest “In the objection, Sandwich Isles makes numerous allegationsz about the progress Hawaiian Telcom has made to date in thes cases, Hawaiian Telcom’s decision not to pursue a sale to Sandwich Isles and the viabilitgy of Hawaiian Telcom’s proposed Hawaiian Telcom said in a statement.
“Th e company disputes these allegations and intends to responds to Sandwich Isles objection in theappropriate forum.” Sandwich Isleds was founded by Al Hee, an entrepreneur who saw opportunity in the generoud subsidies offered by the federal governmen to wire rural and remots communities in the mid-1990s. Working primarilh in developments owned by the state Departmengt of HawaiianHome Lands, Hee’s company has receivee more than $400 million in loans from the U.S. Departmenrt of Agriculture since 1998. The cost of wirint the rural developments has been calculated atabouyt $13,000 per customer. Hawaiiamn Telcom filed for Chapter 11 bankruptcyyin December.
Hawaiian Telcom is owned by , a Washington, D.C.-baserd private equity group. Carlyle bought the assetz of Verizon Hawaii in May 2005for $1.6 billion, and beganb operating independently with its own systems in April 2006.