Adelphia, Auditors Reviewing Borrowing Arrangements

Adelphia Communications

(ADLAC)

said it and its outside auditors are reviewing the company's "co-borrowing" arrangements with off balance sheet partnerships set up with members of its controlling shareholders. The company asked for extra time to file its year-end reports while the review is completed.

Adelphia said the review is aimed at "providing additional clarification" of the partnerships, which last week were revealed to be the source of funds for purchases of stock by Adelphia's controlling Rigas family. The partnerships, whose borrowings are backed by both the family and Adelphia, generally exist to manage cable systems that are owned by the family.

"We recognize that in the current financial environment, shareholders are looking for greater clarity and transparency from the companies in which they choose to invest," the company said in a statement. "We at Adelphia recognize and respect that desire for greater clarity and transparency, and are committed to providing it in a timely manner."

Revelation of the stock-purchase financing drove down Adelphia's shares at the end of last week. The stock closed at $14.90 on Thursday, down more than $5 from its Tuesday close.

Meanwhile, the company is also reportedly considering asset sales to cover the $2.3 billion of debt held by its main partnership, Highland Holdings.