Despite boasts of how much cash it has in the bank, overbuilder RCN turned to a related party to raise $50 million by selling stock priced at just $6.53 per share.
The private placement went to Red Basin, an investment company controlled by Walter Scott Jr., chairman of major RCN shareholder Level 3. RCN will use the cash to repurchase its bonds, which are trading at a discount to par, in some cases a steep discount. That will allow RCN to trim interest costs. RCN's securities filings say the company has $1.2 billion in cash and investments on hand.
- John Higgins