Sprint to Sell, Lease Back Some Network Assets
April 06 2016 - 7:00PM
Dow Jones News
Sprint Corp. said Wednesday it would take another step to
address its cash crunch by selling some network assets and leasing
them back.
This is the latest move by Sprint, which has been losing
customers and money for years, to shore up its cash situation. The
company said it would get a $2.2 billion infusion by selling
network equipment to certain entities, known together as Network
LeaseCo.
The newly formed Network LeaseCo. would be backed by external
investors, including Sprint parent SoftBank Group Corp. Network
LeaseCo. would lease the equipment it purchased back to the
carrier.
The transaction essentially serves as a loan that will cost
Sprint less than tapping debt markets, freeing up much-needed
resources for network investment and operations.
"Sprint and SoftBank have worked together again to create a
unique structure that provides Sprint with an attractive source of
capital," said Sprint Chief Financial Officer Tarek Robbiati.
Sprint expects the $2.2 billion of cash proceeds generated by
this transaction to be repaid in staggered, unequal payments
through January 2018.
The network assets involved in the transaction have a net book
value of about $3 billion, according to Sprint, and consist
primarily of equipment located at cell towers.
In November, the company had made a more unconventional move to
boost its cash pile, saying it would get a $1.1 billion cash
infusion through a deal to sell certain handsets and other devices
it has leased to its customers.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
April 06, 2016 18:45 ET (22:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
SentinelOne (NYSE:S)
Historical Stock Chart
From Sep 2024 to Oct 2024
SentinelOne (NYSE:S)
Historical Stock Chart
From Oct 2023 to Oct 2024