Adelphia unloads telephone unit

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Adelphia Communications Corp. completed the spinoff of its ailing Adelphia
Business Solutions commercial telephone division by distributing Adelphia
Business shares to shareholders.

The spinoff is widely seen as an attempt to distance the telephone unit as
much as possible from the healthy cable division.

The MSO issued one-half share of Adelphia Business for each share of the
parent company's stock.

As of Jan. 8, Adelphia had about 186.7 million class-A shares and 25.1
million class-B Adelphia common shares outstanding. The Rigas family continues
to hold a controlling interest in both companies.

Adelphia Business' shares traded for a big 27 cents apiece Monday.

But the company is carrying $2 billion in debt, it burned through about $600
million last year, it will probably go through another $200 million this year
and it still faces $120 million or so in annual debt service.

The questions on Wall Street are how the Rigases will attempt to reconstruct
the company's capital structure and whether they will take the unit into Chapter
11 to do it.

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