- Company receives initial investment of
$350 million from Searchlight Capital Partners’ total investment commitment of$425 million .
- Completed global refinancing of the capital structure, extending maturities and increasing liquidity. New all-secured capital structure includes
$2 .25 billion of funded debt at attractive rates and includes a$250 million revolving credit facility. - Improved leverage profile when giving full effect to the
$425 million investment from Searchlight; Reduced net debt leverage from 4.14x atJune 30, 2020 to 3.5x. - Immediate investment will accelerate the company’s fiber expansion plans by bringing superior, broadband services to more than 1 million customers.
Investment Structure
The Investment is structured in two stages. In this first stage, Searchlight invested $350 million in the Company in exchange for 8 percent of the Company’s common stock. In addition, Searchlight has received a contingent payment right (“CPR”) convertible, upon the receipt of certain regulatory and shareholder approvals, into an additional 16.9 percent of the Company’s common stock, and the right to receive an unsecured subordinated note with a principal amount of approximately
Board of Directors
The Company also announced its board of directors has appointed
Refinancing
In addition, the Company and certain of its wholly-owned subsidiaries completed a global refinancing in which it raised
- The new credit agreement consists of a five-year
$250 million revolving credit facility and a seven-year term loan in the aggregate amount of$1.25 billion . The term loan extends the Company’s maturity date to late 2027 and is priced at a coupon rate of LIBOR plus 4.75% per annum, with a 1.0% LIBOR floor. - The Company also raised
$750 million aggregate principal amount of 6.500% senior secured notes due 2028.
“We’re very pleased with the strong support from investors and the terms of our refinancing,” said
“We are confident our new structure and enhanced strategy, combined with a resilient and stable core business, provide us everything we need to complete the transformation of our Company,” said
“Searchlight is excited to close the first phase of the transaction, which combined with the debt refinancing, enables Consolidated to immediately increase its investment in fiber,” said
Advisors
Morgan Stanley & Co. LLC and
Forward-Looking Statements
Certain statements in this press release are forward-looking statements and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These forward-looking statements reflect, among other things, our current expectations, plans, strategies, and anticipated financial results. There are a number of risks, uncertainties, and conditions that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include a number of factors related to our business, including the uncertainties relating to the impact of the novel coronavirus (COVID-19) pandemic on the Company’s business, results of operations, cash flows, stock price and employees; the possibility that any of the anticipated benefits of the strategic investment from Searchlight or our refinancing of outstanding debt, including our senior secured credit facilities, will not be realized; the outcome of any legal proceedings that may be instituted against the Company or its directors; the ability to obtain regulatory approvals and meet other closing conditions to the investment on a timely basis or at all, including the risk that regulatory approvals required for the investment are not obtained on a timely basis or at all, or are obtained subject to conditions that are not anticipated or that could adversely affect the Company or the expected benefits of the investment; the anticipated use of proceeds of the strategic investment; economic and financial market conditions generally and economic conditions in our service areas; various risks to the price and volatility of our common stock; changes in the valuation of pension plan assets; the substantial amount of debt and our ability to repay or refinance it or incur additional debt in the future; our need for a significant amount of cash to service and repay the debt restrictions contained in our debt agreements that limit the discretion of management in operating the business; regulatory changes, including changes to subsidies, rapid development and introduction of new technologies and intense competition in the telecommunications industry; risks associated with our possible pursuit of acquisitions; system failures; cyber-attacks, information or security breaches or technology failure of ours or of a third party; losses of large customers or government contracts; risks associated with the rights-of-way for the network; disruptions in the relationship with third party vendors; losses of key management personnel and the inability to attract and retain highly qualified management and personnel in the future; changes in the extensive governmental legislation and regulations governing telecommunications providers and the provision of telecommunications services; new or changing tax laws or regulations; telecommunications carriers disputing and/or avoiding their obligations to pay network access charges for use of our network; high costs of regulatory compliance; the competitive impact of legislation and regulatory changes in the telecommunications industry; and liability and compliance costs regarding environmental regulations; and risks associated with discontinuing paying dividends on our common stock. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements are discussed in more detail in our filings with the
About
About
Searchlight is a global private investment firm with over
Contact:
Investor Relations Contact:
investor@consolidated.com
Media Inquiries:
media@consolidated.com
Source:
2020 GlobeNewswire, Inc., source