SBA to reduce debt with asset sales; subsidiary to amend loan, changing financial covenants

By Sara Rosenberg

New York, March 18 - SBA Communications Corp. intends to reduce debt using the proceeds from the sale of towers to AAT Communications Corp. The transaction, at AAT's choice, will either involve the sale of 679 towers for a purchase price of $160 million in cash or 801 towers for $203 million in cash.

The transaction is expected to close in stages commencing May 9 and ending Sept. 30, and is subject to various conditions including an amendment to the existing senior credit facility of SBA Telecommunications Inc. to modify certain financial covenants.

"In the fourth quarter, we began actively exploring alternatives to improve our balance sheet and stabilize our liquidity position," commented Jeffrey A. Stoops, president and chief executive officer, in a news release. "We explored various options to accomplish those goals, and we determined that the quality of our towers afforded us attractive opportunities to sell some of our assets and reduce debt. This transaction accomplishes our goals, and we believe it evidences both the quality of our portfolio and the long-term attractiveness of our business.

"The net proceeds from the transaction with AAT will reduce our absolute debt and pro forma net debt leverage ratio, and stabilize our liquidity position long-term through the amendment to our credit facility, which amendment is a condition to closing the sale," Stoops continued.

"In addition, we expect improved operating efficiencies and reduced overhead costs to result from the transaction as we focus our future tower ownership activities in the eastern third of the U.S. where the remaining approximately 80% of our towers are located. With the closing of this transaction and the improvements to our balance sheet and liquidity, we believe we will be on a solid path to produce continued attractive same tower revenue and cash flow growth, increasing EBITDA and, ultimately, positive free cash flow," Stoop said.

SBA is a Boca Raton, Fla. owner and operator of wireless communications towers in the United States and Puerto Rico.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.