CARY, N.C.—SpectraSite Holdings Inc. is terminating its build-to-suit contract with Cingular Wireless and transferring its sublease agreements in 545 SBC Communications Inc. towers to Cingular, as well as modifying its agreement with SBC to reduce its future sublease agreements by 187 towers to 707 towers.
SpectraSite also said it is commencing debt tender offers to repurchase some of its senior notes.
The company intends to use up to $340 million of the proceeds of a new $350 million financing commitment from Welsh, Carson, Anderson & Stow to acquire bonds. The bonds carry a 12.875-percent interest rate and are convertible into common shares at any time at a conversion price of 65 cents.
As a result of the SBC agreement, SpectraSite said it expects to receive net proceeds of $98 million at closing, which will be used to reduce bank facility borrowings. The company also will issue about 12.1 million shares of its common stock to SBC to pay for the stock portion of the prepaid rent for the remaining 707 towers and to satisfy any adjustment payments to SBC.
Stephen Clark, president and chief executive officer of SpectraSite, said the company must strengthen its balance sheet.
“A successful debt tender offer would increase our flexibility to execute our current business plan. The agreements with Cingular and SBC also help improve our ability to align our cost structure to today’s market conditions, where near-term capital spending by wireless carriers remains uncertain,” Clark said.
