Cincinnati Bell has sold off its third tranche of its ownership stake in CyrusOne as part of its ongoing effort to pay down company debt.
In this latest effort, the telco sold 4.3 million operating partnership units for $28.41 apiece totaling nearly $122 million.
CyrusOne itself is in the process of pricing a pricing a public offering of 11.3 million shares of its common stock. It will use the proceeds of that IPO to acquire the operating partnership units from a subsidiary of Cincinnati Bell.
This latest sale includes an option to sell another 1.7 million operating partnership units in CyrusOne for about $48 million for a total of $170 million if the underwriter exercises that option. If the option is exercised, CyrusOne would offer another 1.7 million additional shares of its common stock to fund that purchase.
Per the terms of the agreement to spin out CyrusOne from a division of Cincinnati Bell into a separate company, 85 percent of any sales of Bell's CyrusOne partnership units has to be used to pay down company debt.
Initially, Cincinnati Bell had a 68 percent stake in CyrusOne. In June 2014, the telco sold 16 million operating partnership units for $356 million reducing its stake in CyrusOne to 44 percent. This April, the telco sold an additional 14.3 million operating partnership units for $426 million, reducing its stake to 22 percent.
Besides reducing its debt, selling more of its stakes in CyrusOne makes sense for Cincinnati Bell as it continues to enhance its status as a fiber-based broadband player in both the residential and business segments.
In the first quarter, the service provider passed an additional 22,600 addresses with its Fioptics fiber-to-the-premises (FTTP) service. It is also enhancing its middle mile network to take advantage of new wholesale opportunities in the wireless backhaul space made possible of operators building out small cells to enhance coverage of their networks.
- see the release
- Cincinnati Business Courier has this article
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