Cablevision Shares Drop

Dec 19, 2005  •  Post A Comment

Shares in Cablevision Systems fell more than 4 percent Monday after the cable operator announced that it is withdrawing its plan to issue a $3 billion special dividend. Cablevision decided to withdraw the dividend after discovering the payment violates certain rules of its bank-loan agreements.

Cablevision shares at midday were down more than $1, or 4 percent, to $22.99.

The company did not provide details of what rules might have been violated. However, the company did say that the same revelations also would result in its shelving the previously announced$1 billion debt offering.

The company said it was in the process of reviewing its bank loan agreements and stressed that the company has sufficient liquidity to meet its operating requirements. The company also added that its operations have not been impacted by the discovery of the violations.

The withdrawal marked another chapter in Cablevision’s ongoing saga. Cablevision’s founding Dolan family proposed the dividend earlier this fall after withdrawing its $7.9 billion offer to take the cable operator private. Earlier this year Cablevision Chairman Chuck Dolan and his son CEO James Dolan sparred over the fate of failed satellite venture Voom, which was eventually shut down.