RCN announces plan to return capital to shareholders, take on more debt

By Lisa Kerner

Charlotte, N.C., March 15 - RCN Corp. announced an initiative to pursue a potential return of capital to shareholders as part of its ongoing evaluation of strategic alternatives during its fourth-quarter and full-year 2006 conference call today.

Board chairman James F. Mooney said, "We have decided to pursue a balanced recapitalization effort, which if completed would enable us to provide a meaningful return of capital to shareholders in the near-term, while preserving our ability to pursue high-value intermediate- and longer-term organic and strategic growth opportunities."

The board has approved a potential return of capital to shareholders in the range of $350 million to $400 million, funded with a combination of cash on hand and additional borrowings.

RCN's total indebtedness would increase to approximately $500 million, according to a company news release.

The company expects to begin new financing next week and it should be complete in about 30 days.

RCN said it will it will have additional details regarding the potential return of capital in the coming weeks.

Herndon, Va.-based RCN provides video, high-speed data and voice services, delivered over its own fiber-optic local network, to residential and small business customers.

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