Uniti Group Shares Tumble On Windstream Holdings Commentary

Windstream Holdings Inc. WINMQ filed for bankruptcy protection in February days after the telecom service provider lost a legal battle against the hedge fund Aurelius Capital Management.

Since then, shares of Windstream's former subsidiary, the real estate investment trust Uniti Group Inc UNIT, a networking infrastructure manager, have also tumbled.

Uniti's stock was down 5.18 percent at $10.26 at the time of publication Wednesday. 

In Windstream's first-quarter report Wednesday, the company said it is evaluating all options as part of the Chapter 11 reorganization process relative to its master lease with Uniti, including "renegotiation, recharacterization and rejection of the agreement." 

"We believe the lease payment under the master lease is significantly above market." 

Benzinga has contacted Uniti for comment on this story. 

Windstream believes the payment could be cut by 80 percent or more if the lease is renewed in 2030 due to a "significant" decline in the value of copper facilities, Windstream President and CEO Tony Thomas said in a statement. 

"Overall we are pleased with the progress of the Chapter 11 reorganization process. Windstream intends to move through the court-supervised process as quickly and efficiently as possible and will emerge a healthier and stronger company," he said. 

Related Links: 

The Windstream Plunge, Explained

Windstream Holdings' $330M Asset Sale: What You Need To Know 

Posted In: Aurelius Capital ManagementREITHedge FundsGeneralReal Estate