Patrick Drahi has a weak hand in US creditor clash

Optimum Communications

09/10/2026 12:06

The author is a Reuters Breakingviews columnist. The opinions expressed are her own. Refiles to add company ticker symbol in paragraph 1.
By Jennifer Johnson
LONDON, Oct 9 (Reuters Breakingviews) - Patrick Drahi is no stranger to a standoff with furious bondholders. He emerged from last year’s Altice France debt restructuring with a 55% stake in the embattled telecoms group, worth some €2.5 billion, while his lenders took an €8.6 billion debt reduction. Creditors to publicly listed broadband provider Altice USA, now known as Optimum Communications OPTU.N, have already signalled a tougher stance. With the business in decline, $26 billion of debt and bankruptcy looming, controlling shareholder Drahi has a weaker hand in this showdown.
On September 28, a group of creditors that includes Apollo Global Management and Oaktree Capital, filed a New York lawsuit against Drahi, who owns about 40% of Optimum’s equity and controls most of its voting rights, and other company insiders. The document alleges that the billionaire moved valuable cable assets outside of the lenders’ collateral package when the company was already insolvent. They’re now hoping a court will unwind the transactions. But with some $6 billion of the company’s roughly $26 billion debt pile reaching maturity next year, both parties are running out of time to reach an amicable settlement.
Even before the latest legal wranglings, a deal was looking tricky. Creditors say that back in November, Optimum’s then CEO Dexter Goei proposed they take a haircut of $8 billion or more. After those talks fell apart, Optimum shifted assets making up about two-thirds of Optimum’s EBITDA out of creditors’ reach and pledged them as security for new loans. This is a tactic typically used to cajole lenders into agreeing to a haircut. So far, bondholders have resisted these manoeuvres, including by forming a so-called co-operative to prevent Optimum peeling some off and pitting them against others, and disputing the transfers.
The telecom group’s dismal performance makes any deal harder. In the first half of 2026, it lost over 97,000 residential broadband customers — putting it on course to match the prior year’s record exodus of 188,000 if the decline continues apace. In 2021, Optimum’s EBITDA exceeded $4.4 billion, and this year analysts polled by Visible Alpha reckon it will be just under $3.2 billion. The culprit is a combination of aggressive cost cutting, dissatisfied customers and heavy spending on a fibre rollout.
Bondholders will likely face steep losses in any scenario. The group had borrowings of around 8 times EBITDA on a trailing basis in June, and to get leverage down to even a 4 times EBITDA would imply an overall haircut of perhaps 50%. The senior bonds are now trading at 45% of face value, implying a big writedown.
Drahi might be hoping that creditors will agree a voluntary restructuring to avoid a bankruptcy, especially if he dangles a lower loss than they might receive from a court. That's what happened with Altice France, although senior ranking creditors emerged relatively unscathed in that deal, with most of the pain visited on subordinated debt. Here, the losses are likely bigger, and senior lenders may be wary of leaving Drahi and Optimum's shareholders with too much value. And, given Optimum's declining fortunes, any deal Drahi offers may not be enough to fix its creaky balance sheet. A bankruptcy would have the added benefit of handing control over to a court, which might unpick the asset transfers.
True, a court process could be costly and lengthy, during which time Optimum’s performance may deteriorate. That means a deal is still possible, but creditors have every reason to play hardball.
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CONTEXT NEWS
On September 28, Optimum Communications was sued by a group of its creditors, including Apollo Global Management, Oaktree Capital and Arini. The lawsuit alleges that controlling shareholder Patrick Drahi and his associates orchestrated a series of fraudulent transfers designed to move billions of dollars in cable assets out of lenders’ reach. The result, according to the filing, is that equity interests have been placed ahead of creditor claims on Optimum’s debt.
The telecoms group, formerly known as Altice USA, disputes the illegality of the asset transfers. “The actions the company has taken to protect and maximize stakeholder value were conducted in full compliance with its existing debt agreements and applicable law,” it said in a statement. Optimum intends to address the claims through the “appropriate legal channels”, it added.
In June, the group acknowledged that it lacked the resources to repay its 2027 debt maturities without a restructuring or capital injection.

(Editing by Neil Unmack; Production by Varun H K)
((For previous columns by the author, Reuters customers can click on JOHNSON/Jennifer.Johnson@thomsonreuters.com))