Struggling Charter Communications Inc., the nation’s fourth largest cable operator, said Thursday that it plans to file a prearranged Chapter 11 bankruptcy by April 1.

Charter, which is controlled by Microsoft Corp. co-founder Paul Allen, said it has reached an agreement in principle with holders of $8 billion in debt who will give up repayment of their debt. In return, they will receive common shares, or warrants for rights to get common shares, that translate to nearly owning the entire company after bankruptcy.

Charter provides cable-TV and Internet service in Albert Lea through a franchise agreement with the city government.

Allen will remain as an investor and retain the largest voting interest in Charter. While his 51 percent stake in the company will be wiped out, along with those of other shareholders as the stock is canceled, Allen was given voting control by debt holders. Allen also holds some debt, which will be converted, and preferred stock.

In a prearranged bankruptcy, a company enters into reorganization with a plan to emerge that has the approval of major stakeholders. The rest of the creditors will be dealt with through bankruptcy court. In a prepackaged bankruptcy, each creditor has voted on the plan before the filing.

Charter said it plans to pay what it owes to suppliers and other trade creditors in full and go about the normal course of business.

“We are pleased to have reached an agreement with such a significant portion of our bondholders on a long-term solution to improve our capital structure,” said Neil Smit, president and chief executive officer, in a statement.

Allen, who owns the Seattle Seahawks of the National Football League and the National Basketball Association’s Portland Trail Blazers, put in over $7 billion into Charter, his biggest investment after he left Microsoft in 1983. Over the years, Charter piled on debt for acquisitions. It now serves 5.5 million customers in 27 states.

The company said two of its subsidiaries will make a $74 million interest payment before the 30-day grace period for debt that was due on Jan. 15 expires. Thursday’s agreement with debt holders leaves Charter with $13 billion of mostly bank debt, expiring from 2013 to 2016.

Separately, Charter said fourth-quarter revenue is expected to increase by 6.6 percent to $1.66 billion, with adjusted earnings before interest, taxes, depreciation and amortization up nearly 10 percent to $620 million.

The company expects to take a $1.5 billion impairment charge for fiscal 2008.

Charter has been skirting insolvency for years, but this time it faces a brutal combination of tight credit and billions of dollars of debt coming due. The company hasn’t recorded a profit since it went public in 1999.

Shares of St. Louis-based Charter tumbled 3.4 cents, or 48 percent, to about 3.7 cents on Thursday. The stock earlier hit a low of 2.5 cents.