Windstream confirmed that it has received all regulatory approvals from state public service commissions required for its planned real estate investment trust (REIT) spinoff, which will be named Communications Sales & Leasing, Inc. (CS&L). Windstream earlier received a favorable private letter ruling from the Internal Revenue Service relating to the transaction.
“Securing these regulatory approvals is an important milestone in our work and affirms the compelling benefits of the transaction to consumers and businesses,” said Windstream Director Francis X. “Skip” Frantz, who will serve as chairman of CS&L’s board. “The spinoff remains a strategic priority for Windstream and with the state regulatory approval process complete, we are focused on executing the final steps of the transaction.”
The transaction is expected to close in the first half of 2015.
In July 2014, Windstream announced a bold plans to spin off its fiber and copper network, along with certain other assets, into an independent, publicly traded real estate investment trust (REIT). The network operations business would then lease back the physical assets to Windstream through a long-term triple-net exclusive lease with an initial estimated rent payment of $650 million per year.
The company said the separation of its physical network from its services business will enable it to become a more nimble competitor, while accelerating network investments, and maximizing shareholder value. The new REIT would be open to diversify its assets through acquisitions.
“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 Jeff Gardner, president and CEO of Windstream. “Additionally, the REIT will have geographically diverse, high-quality assets and sustainable cash flows with the ability to grow and diversify over time.”
