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GST selling
assets to Time
Warner unit
The parent of GST Telecom
From staff and wire reports
Hawaii also has filed for
Chapter 11 bankruptcyVANCOUVER, Wash. -- GST Telecommunications Inc. said today it has filed for Chapter 11 protection and has agreed to sell substantially all its assets to Time Warner Telecom Inc. for $450 million in cash.
The provider of voice, Internet and data services in the Western United States, including Hawaii, said the filing was necessary because of growing cash-flow problems, a substantial debt load and inability to secure other financing.
The asset sale is subject to approval by the U.S. Bankruptcy Court in Delaware, as well as federal and state regulators.
GST invested tens of millions of dollars to set up a fiber-optic network connecting the major Hawaiian islands.
In September, the company put its local subsidiary, GST Telecom Hawaii, up for sale but no buyer was found. The unit has about 50 local employees.
"If the deal goes through, we anticipate it would include Hawaii," said Bob Meldrum, a Time Warner Telecom spokesman in Colorado.
He said he could not provide additional details on the deal.
Vancouver, Wash.-based GST warned last week it was running out of money and might have to file for bankruptcy protection.
Littleton, Colo.-based Time Warner Telecom, which is 48-percent owned by Time Warner Inc., said it plans to expand into eight to 12 metropolitan markets in the next two years.
In addition to its fiber-optic network, GST Telecom Hawaii provides phone service to local businesses and operates Internet service provider GST Hawaii Online.
Bloomberg News contributed to this report.
