Sprint raises $2.2B from network deal

first_img Previous ArticleVerizon to buy stake in Awesomeness TV to bolster go90Next ArticleOrange ties up Cellcom Liberia deal Kavit Majithia US operator Sprint announced a deal for the sale and leaseback of certain network equipment, providing it with $2.2 billion of funding, as part of its ongoing turnaround efforts.The company, which has announced a number of financial arrangements over the past year to raise cash, will create a new unit, Network LeaseCo, which will acquire assets with a book value of $3 billion. These will then be used as collateral to raise $2.2 billion in borrowing from external investors, including Sprint’s parent company SoftBank.The arrangement will see Sprint then lease back the assets, primarily consisting of equipment located at the cell towers, while repaying the $2.2 billion proceeds it will receive in “staggered, unequal payments through January 2018”.The assets will return to Sprint after it pays back the amount.Sprint is reportedly facing a $2.3 billion debt repayment at the end of this year.“This transaction is an important first step in addressing upcoming debt maturities and allows us to stay focused on our corporate transformation, which involves growing top line revenue and aggressively taking costs out of the business to improve operating cash flows,” said Sprint CFO Tarek Robbiati in a statement.The move follows a similar deal last year, when Sprint, SoftBank and others established a handset leasing company, which paid Sprint $1.2 billion for a chunk of the operator’s phone inventory.Last month, SoftBank also revealed plans to create a subsidiary to lend money to Sprint, with loans secured against its spectrum holdings.According to Wall Street Journal, its latest cash generating plan will give the company better financing terms than it may have been offered in the high yield debt market.The transaction is expected to close next week. Home Sprint raises $2.2B from network deal Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >> Read more Asia SoftBank Corp targets growth through acquisitions SoftBankSprintcenter_img Deutsche Telekom, SoftBank tipped for T-Mobile trade Related Author OneWeb, SoftBank Corp plot Japan satellite move Tags AddThis Sharing ButtonsShare to LinkedInLinkedInLinkedInShare to TwitterTwitterTwitterShare to FacebookFacebookFacebookShare to MoreAddThisMore 07 APR 2016 last_img

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