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NII Holdings, Inc.
NIHD, a
provider of differentiated mobile communication services operating under the
Nextel brand in Latin America, today announced it has agreed to sell
approximately 2,790 towers in Brazil and 1,666 towers in Mexico to American
Tower Corporation
AMT in two separate transactions for total estimated
proceeds based on current foreign currency exchange rates of $413 million and
$398 million, respectively, subject to certain adjustments, including
adjustments based on the actual number of towers sold. Both Nextel Brazil and
Nextel Mexico agreed to leaseback the towers from American Tower for a minimum
12-year initial lease term and have the option to extend the lease for
additional renewal periods. NII International Telecom S.C.A, a subsidiary of
NII based in Luxembourg, has agreed to provide certain credit support with
respect to the obligations of Nextel Brazil. The transaction agreements
provide that all payments, including the purchase price and site rental, will
be made in local currencies. As a result, the estimated U.S. dollar
denominated proceeds amounts are subject to changes in value of the local
currencies relative to the U.S. dollar.
"We are excited to reach agreement with American Tower and achieve our goal of
unlocking the value of a significant portion of our tower assets while raising
additional liquidity," said Steve Shindler, chief executive officer of NII
Holdings. "We will use the proceeds from the transactions to support the
continuing investments in our next generation network deployments in our
largest markets, Brazil and Mexico, which we believe offer the best
opportunity for value creation and long-term growth and profitability."
The transactions are subject to regulatory approvals and the initial closings
are expected to be completed in the fourth quarter of 2013. The initial
closings are expected to include about 4,000 towers and will be followed by
subsequent closings as certain closing requirements relating to the remaining
towers are satisfied.
NII's service coverage and next generation deployment plans will not be
affected by this transaction. The Company will continue to locate its network
equipment on the towers and will have additional space available for
technology evolution.
The Company expects that a majority of the assets sold and leased-back will be
accounted for as capital leases. As a result, the transactions are expected to
have a positive impact to OIBDA, but are not expected to materially impact
2013 results.
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