Adelphia Communications Will Sell Stock, Debt to Raise $1.5 Billion for Loan Repayment

Adelphia Communications Corp., a money-losing cable television operator, said it will sell stock and debt convertible into shares to raise $1.5 billion, 69% more than previously planned.

The company will sell 17 million Class A shares worth $750 million and $750 million of 6% subordinated notes due 2006, said a statement on PRNewswire. The No. 6 U.S. cable provider, based in Coudersport, had planned to raise $885 million.

The family of Chairman John Rigas, which controls Adelphia, will buy $167 million of the notes due in 2006 and 5.82 million Class B shares, which aren’t publicly traded, at $42.96 each, raising $417 million. They are convertible into Class B shares at $55.49, the same price for the notes convertible into Class A shares and 23% more than Wednesday’s close of $45.06.

The company and its cable rivals have spent about $41 billion upgrading cable lines for new products, including fast Internet service and hundreds of TV channels. At least four other cable operators, including Charter Communications Inc. and Cox Communications Inc., recently issued debt, and Mediacom Communications Corp. said Thursday that it’s selling $500 million in bonds.

Adelphia, which lost $130.9 million in the third quarter, said it will use the proceeds to repay bank loans. A spokeswoman for the company wasn’t immediately available for comment.

Adelphia shares rose $1.69 to $46.75 in trading on Nasdaq. They had fallen about 36% in the last year.

Banc of America Securities and Salomon Smith Barney will manage the share and convertible-note sales. They arranged a $1.3-billion short-term loan for Adelphia earlier this month. Credit Suisse First Boston, Goldman Sachs Group Inc. and Morgan Stanley Dean Witter & Co. are helping sell Adelphia shares. The stock and bonds sales are expected to be completed Tuesday, while the Rigas family will complete its purchases 270 days after the other notes and bonds are sold.

Adelphia’s 9.88% notes due in 2007 carry below-investment-grade ratings of B2 from Moody’s Investors Service and B+ from Standard & Poor’s.