The fourth largest mobile operator in the US, Sprint said that it would raise $2.2 billion in cash through a deal for the sale and lease-back of certain network assets. The operator has entered into a network leaseback deal with Network LeaseCo, a new entity backed by Sprint’s parent company, SoftBank Group.
The assets acquired by Network LeaseCo will be used as collateral to raise approximately $2.2 billion in borrowings from external investors, including SoftBank.
The network assets involved in the transaction, which have a net book value of approximately $3 billion and consist primarily of equipment located at cell towers, will remain on Sprint’s consolidated financial statements and will continue to be depreciated, said Sprint.
As of December 31, 2015, Sprint had total liquidity of $6 billion with an additional $600 million of availability under vendor financing agreements that can be used toward the purchase of 2.5 GHz network equipment.
Tarek Robbiati, CFO, Sprint
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 topline revenues and aggressively taking costs out of the business to improve operating cash flows.
