Windstream has received all of the state regulatory approvals it needs from state public service commissions (PSC) in its territory to move ahead with its planned real estate investment trust (REIT) spinoff.
Among the state agencies that granted approvals was the Pennsylvania Public Utility Commission.
The new company, which will be named Communications Sales & Leasing Inc. (CS&L), also received a favorable private letter ruling from the Internal Revenue Service relating to the transaction.
"Securing these regulatory approvals is an important milestone in our work and affirms the compelling benefits of the transaction to consumers and businesses," said Windstream Director Francis X. "Skip" Frantz, who will serve as chairman of CS&L's board.
One of the next steps for Windstream's CS&L is to secure a president and CEO of CS&L since Tony Thomas has taken over as CEO of Windstream.
After meeting customary conditions, including the effectiveness of CS&L's Form 10 registration statement and final approval by Windstream's board of directors, Windstream expects to complete the transaction by June 30.
On Feb. 20, Windstream will hold a special stockholders meeting in conjunction with the REIT spinoff to approve a 1-for-6 reverse stock split and an amendment to the certificate of incorporation for Windstream Corporation, a subsidiary of Windstream Holdings, that will facilitate the conversion of Windstream Corporation into a limited liability company.
In July, Windstream announced it would spin off a number of its copper and fiber assets into a publicly traded REIT, a move it said will enable it to lower debt by nearly $3.2 billion while accelerating its broadband and IP-based network transitions. The REIT will lease use of the assets to Windstream through a long-term triple-net exclusive lease and Windstream will operate and maintain the assets to deliver advanced communications and technology services to consumers and businesses.
Since Windstream made its announcement in July, a number of other fellow telcos, including AT&T (NYSE: T), Verizon (NYSE: VZ), CenturyLink (NYSE: CTL) and Frontier, have been continually asked if they would follow a similar path. However, none of these service providers has indicated any interest in developing a REIT.
- see the release
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