Time Warner Telecom Inc. (www.twtelecom.com) has agreed to purchase the majority of GST Telecommunications Inc.'s (www.gstcorp.com) assets for $690 million, about $240 million more than Time Warner initially pledged . A portion of GST's assets in Hawaii was not included in the sale.
On May 17, when GST filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware, Time Warner announced that it planned to buy all of GST's assets for $450 million, less than half of book value of GST's assets, according to many detractors. However, at the time, another company said that it planned to purchase GST's operations in Hawaii. The company, MBN Communications Inc. (www.mauibiz.net), said it agreed on April 27 to buy GST's CLEC and ISP operations on the islands.
As a result of these issues, the judge presiding over GST's bankruptcy case ordered that the company open bidding for its assets. An auction was conducted between Aug. 22 and Aug. 25.
Last Friday, at the conclusion of the auction period, GST received approval to proceed with the sale to Time Warner for $690 million. A Time Warner spokesman said that the assets the company is buying includes some, but not all, of the Hawaiian operations. GST could not be reached by our deadline for comment about what will happen to the remaining Hawaiian assets.
Time Warner expects to receive bankruptcy court approval for its purchase by mid-September. Additional approvals, including regulators' blessings of the sale, are expected by the end of this year.
