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Windstream to form REIT in move that lowers company's debt

Rochester Business Journal
July 29, 2014

Windstream Corp. plans to spin off some of its telecommunications network assets into a separate publicly traded real estate investment trust consisting of roughly 25 employees, company officials said Tuesday.

The move will allow the company to further its network investments. The REIT will own the company’s fiber and copper network, as well as its fixed real estate assets.

The decision impacted early trading Tuesday increasing the share prices of rivals, including Frontier Communications Corp. (Nasdaq: FTR), whose shares were up nearly 15 percent by late afternoon.

REIT status has been sought after by numerous companies throughout the years, including American Tower Corp., which announced a similar plan in 2012.

The spinoff will lower the company’s debt by $3.2 billion, Windstream officials said. The company plans to lease the use of the spun-off assets with a rent payment of $650 million a year, officials said.

"This transaction will make Windstream a more nimble competitor in today’s increasingly dynamic communications marketplace and accelerate our deployment of advanced communications services," said Jeffrey Gardner, president and CEO of Windstream, in a statement. "Additionally, the REIT will have geographically diverse, high-quality assets and sustainable cash flows with the ability to grow and diversify over time."

Windstream chief financial officer Tony Thomas will become CEO of the REIT. Francis Frantz, a Windstream director, will serve as chairman of the REIT’s board, Windstream officials said.

(c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail service@rbj.net.


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