Billionaire Paul Allen is considering purchasing Charter Communications' ( CHTR) debt or convertible bonds in an effort to reduce the company's leverage, according to a Securities and Exchange Commission filing Thursday.

Allen, who owns 56.4% of Charter's shares, is also weighing other restructuring transactions, including a debt-to-equity exchange. In addition, the filing said Allen could take the company private, although he has not yet determined what, if any, course of action to take and hasn't made any proposals to Charter.

The filing also noted that Allen has acquired about 5.3 million Charter shares over the last month or so.

Shares of Charter were up 10% to $2.85 on the news. Other stocks in the group also rose, with Comcast ( CMCSK) and Cox Communications ( COX) up 5% to $19.43 and $21.36, respectively. The gains came on a day when the entire market rallied strongly.

With Charter's stock and debt trading at a deep discount, some observers had speculated whether Allen might purchase the firm's debt. Charter has fallen 83% this year.

During a conference call earlier this week, the cable operator's CEO Carl Vogel said that while he'd certainly suggested the idea to Allen, he had no knowledge of Allen's plans along these lines. "Paul doesn't share what he's doing with me personally," said Vogel, who added that members of the company's management team were buyers of Charter's equity and debt securities.

On Tuesday, Charter reiterated financial guidance for the year but cut capital expenditures by $125 million for the year to $2.35 billion. For the second quarter ended June 30, Charter lost $202 million, or 69 cents a share, against a year-ago loss of $274 million, or $1.07 a share. Charter reported $1.16 billion in revenue, up 14.3% from pro forma figures for the second quarter of 2001, and operating cash flow of $501 million, up 13.8%.

George Mannes contributed to this story.

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