Adelphia Asks Banks for $1.5-Billion Loan

Adelphia Communications Corp. is asking two banks to arrange a $1.5-billion loan to help the company continue operating when it files for Chapter 11 bankruptcy protection, people familiar with the matter said.

The sixth-largest U.S. cable company asked Citigroup Inc.’s Salomon Smith Barney Inc. and J.P. Morgan Chase & Co. for the financing, which would be the largest bankruptcy loan since Enron Corp. got $1.5 billion from banks in November. General Electric Capital Corp. also may participate in the loan, the sources said.

Adelphia, in default on more than $7 billion in bank debt and delisted from Nasdaq, is on the brink of filing for bankruptcy, investors have said. Adelphia shares have plunged more than 99% since the company revealed in March that it guaranteed billions in loans to partnerships controlled by company founder John Rigas that weren’t included on the balance sheet.

The loan would give the company time to sell assets, such as cable systems, and regain footing under protection from creditors.

Spokespeople for Adelphia, Salomon and J.P. Morgan declined to comment.