Windstream has made its final move to spin off parts of its wireline network assets into Communications Sales and Leasing (CS&L), a move that it says will reduce debt and provide capital to make new network investments.
The service provider also nearly completed a one-for-six stock split of Windstream's shares. Under the terms of the spinoff and reverse stock split, Windstream shareholders will receive one share of CS&L for every five shares of Windstream held of record as of 5 p.m. EDT on April 10, 2015.
Tony Thomas, president and CEO of Windstream, told FierceTelecom in a previous interview that CS&L could provide potential benefits to other telcos.
"I think the REIT is the most underappreciated part of our story," Thomas said. "We created this new company that will enable other telcos to provide quick and easy cash so they can make capital investments, restructure their balance sheet or ultimately provide cash back to their shareholders."
The company expects the spinoff to be a tax-free distribution to Windstream shareholders, and it does not require any of the shareholders to take any actions. Windstream said it expects the CS&L shares to be deposited into shareholders' accounts by April 30.
Now that the spin-off is completed, CS&L is an independent, publicly traded company that began trading on the NASDAQ stock exchange under the symbol "CSAL" on April 27. Windstream will continue to trade on the NASDAQ stock exchange under the symbol "WIN."
The service provider is also realigning its leadership team as Francis Frantz will step down from Windstream's board to take up the role of chairman of CS&L's board.
CS&L will be led by Kenny Gunderman, the former Stephens Inc. executive that Windstream appointed as CEO in February.
Through the agreement it has with Windstream, CS&L will lease assets to the telco through a long-term triple-net exclusive lease. Windstream will operate and maintain the assets to deliver services to consumers and businesses, while CS&L will focus on expanding and diversifying its assets and tenants through future acquisitions.
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