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HawTel narrows its loss


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POSTED: Tuesday, June 02, 2009

Hawaiian Telcom narrowed its net loss by $9 million in April from March, according to the latest monthly operating report filed in U.S. Bankruptcy Court.

For April the company recorded a net loss of $6.1 million, down from $15 million in March, due mostly to the court's approval of an extension of its contract with consulting firm Accenture under new terms. In February, Hawaiian Telcom posted an $8.3 million loss.

Operating revenue remained relatively flat between March and April, ending at $34.5 million in April. Hawaiian Telcom continues to owe $2.4 million in interest income from loans that are still outstanding.

“;Overall the results are in line with expectations, and we're continuing to work on the reorganization,”; said spokesman Brian Tanner.

Since filing for bankruptcy on Dec. 1, Hawaiian Telcom is required to file the monthly operating reports with the Bankruptcy Court. Prior to filing for bankruptcy, the company posted quarterly results with the U.S. Securities and Exchange Commission.

In April, Judge Lloyd King approved $6 million in bonuses for 1,418 eligible Hawaiian Telcom employees. King said, however, that some of the payments would have to be deferred until Hawaiian Telcom emerges from bankruptcy.

Each nonunion employee was awarded full payment of up to $10,950, plus an additional 8.33 percent of their annual bonus to cover the first month of bankruptcy. Any employee that earned more, however, has to wait until the company is solvent, and must still be employed in order to receive it.

Attorneys for the U.S. Trustee and Official Committee of Unsecured Creditors objected to the bonuses, saying it favored the employees over other general unsecured creditors.

But Hawaiian Telcom defended its plan to give the bonuses, saying its employees were the key to its long-term success and ability to emerge out of Chapter 11 bankruptcy.

In May the company also began promoting a Hawaiian Telcom myChoice Plus bundle, offering local, long-distance and high-speed Internet for $50.95 a month for new customers. High-speed Internet for existing home phone service customers is also being offered for $19.99 a month.

The company did not as of yesterday have detailed information on how many customers have signed up for the new plans.

Hawaiian Telcom brought Accenture on board in February 2007 to clear up back-office operation problems the company blamed on its former provider, BearingPoint Inc.

The Bankruptcy Court approved a five-year extension of the Accenture contract under new terms and pricing, which helped reduce the net loss in April.