Global Signal Leases Sprint Towers
Sprint has reached a definitive agreement with Global Signal under which Global Signal will have exclusive rights to lease or operate more than 6,600 communications towers from Sprint for 32 years.
Sprint expects to receive $1.202 billion in cash at the time of the closing.
Under the terms of the transaction, which is expected to close in the second quarter of 2005, Global Signal will have exclusive rights to lease or operate the Sprint towers and will take over existing collocation arrangements with tenants who lease space on these towers. Global Signal will also be able to sublease space on the towers to additional third party tenants and will have the option to purchase the Sprint towers at the end of the lease term at a price of approximately $2.3 billion. Sprint has committed to sublease space on the towers from Global Signal for a minimum of 10 years at an initial rate of $1,400 per month, per tower.
Sprint, through ongoing evaluation of its business, determined last year that the tower collocation business is not considered a core business. After reviewing possible scenarios, Sprint concluded that accepting the offer from Global Signal was the best course of action for creating economic value while maintaining network integrity. The transaction with Global Signal will contribute to Sprint’s increased financial strength and strong cash position.
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