Spectrasite Holdings files for Chapter 11

By Sara Rosenberg

New York, Nov. 15 - Spectrasite Holdings Inc. announced on Friday that it filed for Chapter 11 in order to implement the previously disclosed restructuring plan that was negotiated with bondholders.

The Chapter 11 filing will only involve SpectraSite Holdings, Inc. The operating company, SpectraSite Communications, Inc., is not included.

Under the plan, all the holding company debt will be eliminated and annual interest expense will be reduced by $200 million, SpectraSite's $2.0 billion principal amount at maturity of senior notes plus accrued interest will be exchanged for all the common stock of the reorganized company, existing stockholders will receive warrants for 5% of the reorganized company's stock with a strike price based on an enterprise value of $1.5 billion and options will also be issued to management.

The restructuring is not expected to cause a default on or otherwise affect SpectraSite Communications' $1.1 billion senior credit facility.

"The Chapter 11 filing brings us another step closer to completing the financial restructuring process. It is our plan to emerge from Chapter 11 in the first quarter of 2003 with a solid balance sheet and a strong future. Our agreements with Cingular and SBC will further enhance our financial flexibility and strength," said Steve Clark, president and chief executive officer, in a news release.

Agreements with Cingular and SBC were amended and now involve the transferring of the company's interest in 545 SBC towers to Cingular, the reduction of the company's future sub-lease commitment with SBC by 294 towers and the extension of closings for the remaining SBC towers through the third quarter of 2004.

Proceeds from the agreements will total $73.5 million and will be used to repay a portion of the outstanding debt under SpectraSite Communications' senior credit facility.

The Cary, N.C. wireless tower operator believes it will receive the votes required for the restructuring plan since approval has already been given from approximately two-thirds of the holders of its outstanding notes.

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