AT&T Wireless Services Inc.’s largest affiliate, TeleCorp PCS Inc., raised $184 million last Tuesday from its initial public offering.
TeleCorp priced its IPO offering of 9.2 million shares of class A common stock at $20 per share, which includes about 1.6 million shares offered to some of the company’s existing stockholders.
The shares closed at $33 on Tuesday. In a separate concurrent offering, the company also agreed to sell up to 2.245 million shares of its class A common stock to AT&T Wireless PCS L.L.C., an existing stockholder, at a price per share equal to the IPO price less an amount equal to the underwriting discount the company is paying to the underwriters in the IPO.
TeleCorp holds personal communications services licenses in 21 South-Central and Eastern markets, covering about 16.5 million people. The carrier’s subscriber base was about 75,000 subscribers at the end of September in the 15 markets it rolled out service to in the first half of the year.
TeleCorp said it is committed to investing about $55 per covered person to construct its network through 2001.
“The network development requirements imposed by our agreements with AT&T create significant capital requirements, much of which will be covered by indebtedness we incur,” the company said in its prospectus. “We believe that the capital we have raised to date as well as the other capital resources currently available to us under our credit facilities, our committed cash equity and the proceeds of this offering will be sufficient to meet our projected capital requirements through Dec. 31, 2001.”
Salomon Smith Barney, Lehman Brothers, Deutsche Banc Alex.Brown and Merrill Lynch & Co. are the managing underwriters in the IPO. TeleCorp granted the underwriters a 30-day option to purchase up to an additional 1.38 million shares of its class A common stock solely to cover over-allotments, if any.
