Sprint Nextel Will Make Divests
Telecom conglomerate aims to wrap up court-ordered sale by 2010 of network assets across Midwest states.
June 15, 2009
Sprint Nextel will sell assets across Illinois, Iowa, Michigan and Nebraska, all part of its planned, court-ordered process to make divestitures.
The listed, Kansas-based global telecom company will sell off assets from its Integrated Digital Enhanced Network (iDEN) to bring it into compliance with an Illinois court roling that requires it to relinquish holdings on Nextel networks in the four states by late January 2010.
Judging by recent attempts to make exits of telecom network assets, Sprint Nextel could have difficulty finding a buyer at the price it wants. Earlier this month, Qwest Communications abandoned its attempt to sell its long-haul network; that came on the heels of its successful deal to dump access lines in 14 states to Frontier Communications.
Private equity has recently made plays in the telecom space. GE Capital co-wrote a $230 million loan to Transaction Network Services, a smaller telecom provider. Transaction Network Services, in March, bought VeriSign Inc.’s communication services group for $226 million. The loan brings its full credit facility to $423 million. There has been a rise in telecom-related acquisitions during the past year. In April, Deltaq, a Denmark-based listed private equity firm, bought a 74 percent stake in Combilent Group. Also this year, Bicoastal Communications acquired Grand Valley Telecommunications, a private telecom company based in Grand Junction, Colorado.
Sprint Nextel has earned conflicting ratings since two companies merged to establish the conglomerate; a Standard & Poor’s report posted at Thomson Analytics said the company is in a weakened state, however, the company’s balance sheet remains strong—and is positioned to grow at a time when competitors are seeing cash dwindle, if and when its asset sale is completed.
The company said the impact on its results will be minimal and it will not sell any assets from its national network. Sprint Nextel predicted no services interruptions or harm to subscribers’ service as a result of the transition. Citi will be financial advisor to Sprint Nextel throughout the process. The company did not respond to requests for comment.
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