A $400 million offer to acquire Hawaiian Telcom Inc. lacks adequate financing, will increase debt and will likely prolong the local phone company's bankruptcy proceedings, Hawaiian Telcom said.

In a bankruptcy court filing Friday, Hawaiian Telcom said it opposes Sandwich Isles Communications Inc.'s plan to reorganize the phone company because Sandwich Isles doesn't have the expertise to run a statewide telecommunications network and lacks the necessary state and federal permits to do so.

"Among other things, Sandwich Isles doesn't have any committed financing to fund the proposed acquisition or a credible strategy of obtaining it, as its only proposed financing is sheer speculation," the company said.

"Sandwich Isles has the support of no one."

Hawaiian Telcom has presented a competing, $460 million reorganization plan that would convert the phone company's debt into stock and provide $300 million in new financing.

In its filing, Hawaiian Telcom said its creditors committee, its secured lenders and union representatives do not support Sandwich Isles' plan, which was submitted last week. The company added that Sandwich Isles wants to terminate the company's pension plan for unionized workers.

Sandwich Isles said its plan is better. The company said it will provide $250 million in cash to pay off Hawaiian Telcom's creditors and $150 million in new financing to boost the local phone company's infrastructure.

Sandwich Isles added it has not been given access to the details of Hawaiian Telcom's finances and that the local phone company's opposition is based on its review of a one-page term sheet and not on an in-depth analysis of what Sandwich Isles plans to offer.

Company President Albert Hee said Sandwich Isles has invested tens of millions of dollars to build its own fiber optics network, while Hawaiian Telcom has not invested enough in its infrastructure, making it uncompetitive.

Hee said the Hawaiian Telcom plan also lacks local ownership, which he said would be more sensitive to employees' concerns and the needs of local communities.

Established in 1995, Sandwich Isles, which employs between 90 and 100 people, provides subsidized phone lines to about 2,000 rural customers living on property developed by the Department of Hawaiian Home Lands.

The federal government pays Sandwich Isles about $13,000 per customer for providing the service, which is 100 times higher than the average subsidy for rural telephone service on the Mainland.

Founded in 1883, Hawaiian Telcom is the state's largest phone company with more than 500,000 business and residential customers in Hawai'i.

The company filed for bankruptcy protection Dec. 1 because of its heavy debt load and the loss of thousands of customers to wireless and other competitors. Hawaiian Telcom incurred its debt when the Carlyle Group, a Washington, D.C.-based investment firm, bought the local phone company in 2005 for $1.6 billion.

In its filing, Hawaiian Telcom said its advisers, Lazard Freres & Co. LLP, contacted dozens of potential buyers and investors. Hawaiian Telcom said it negotiated with one unidentified buyer for two months before the deal fell apart.

It also held talks with Carlyle and its bondholders for a stand-alone reorganization before deciding on its current reorganization plan, which all but eliminates Carlyle's interests in the phone company.

Hawaiian Telcom currently is not required to consider Sandwich Isles' reorganization plan. After filing for bankruptcy in December, the company had six months to come up with its own reorganization plan without having to consider alternative plans.

U.S. Bankruptcy Judge Lloyd King recently extended that period to June 30 and the company is seeking another extension, to Sept. 30. A hearing on that request is scheduled for July 1.