Windstream says it has reached a Plan Support Agreement (PSA) with its first lien creditors that covers the main terms of a financial restructuring strategy. The service provider says it also has reached an agreement with Uniti Group Inc. that resolves pending litigation between the two companies. With these pieces in place, Windstream says it hopes to file its Chapter 11 plan of reorganization with U.S. Bankruptcy court by the end of this month.
Windstream voluntarily filed for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York on February 25, 2019 (see "Windstream Holdings files for Chapter 11 bankruptcy, pledges to continue operations"). The company says the PSA will reduce its present funded debt by more than $4 billion, enable what it termed “a substantial reduction” in Windstream’s annual debt service obligations, and provide it access to financing once it clears the Chapter 11 process. Meanwhile, the agreement with Uniti sees the latter agreeing to earmark up to $1.75 billion in network investments for Windstream through 2030. Uniti also has agreed to pay Windstream approximately $490 million and to purchase certain unused and underused fiber assets from Windstream for an additional $285 million. These latter assets currently generate approximately $29 million in annual OIBDAR, Windstream asserts.
“We are pleased to have reached an agreement with creditors on the terms of a comprehensive financial restructuring that will significantly reduce our debt and strengthen our long-term competitive position,” said Tony Thomas, president and CEO of Windstream. “This agreement demonstrates our creditors' confidence in our go-forward business plan and will enable Windstream to work through the financial restructuring process on an expedited basis.
“Our new capital structure will enable continued innovation in vital enterprise-class offerings such as SD-WAN and UCaaS, promote the deployment of on-net solutions, and reinforce our ability to deliver an amazing customer experience supported by a superior digital platform,” Thomas added. “Additionally, our new strategic partnership with Uniti will allow us to expand 1-gig fiber-based internet service to more than half of our Kinetic broadband footprint over the next several years.”
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