Windstream Holdings Inc. laid out more details Thursday on its plans to spin off certain telecommunications network assets into an independent real estate investment trust, and it set a special shareholders meeting for February.
The Little Rock-based company said in a statement that it is “refining” it transaction structure so that it will retain 19.9 percent of the shares in the investment trust and distribute 80.1 percent to Windstream stockholders. The retained shares will be sold “opportunistically” during the year after the spinoff, and the net proceeds will be used to retire about $4 billion in debt, the company said.
“The expected annual dividend per share in the aggregate for the two companies will be 70 cents per current Windstream share,” the company said, adding that it plans to maintain its current dividend practice through the transaction’s close.
Windstream announced July 29 that it would turn its copper and fiber networks, along with other assets, into a real estate investment trust in 2015, pending regulatory approval. Windstream provides voice and data services to businesses. It also offers broadband Internet and phone services in rural areas.
The company has received approval for the plan from the Internal Revenue Service and a majority of the approvals it needs from state regulatory agencies, according to the statement.
Windstream also said it will host a special stockholders meeting Feb. 20, in conjunction with the spinoff, to approve a 1-for-6 reverse stock split and an amendment to Windstream Corp.’s certificate of incorporation that will change the corporation into a limited liability company, adding that the conversion will allow Windstream Holdings to avoid incurring a tax liability of about $600 million to $800 million.
The company held a conference call at 7:30 a.m. to review the revised ownership structure. A replay of the call, available until midnight Wednesday, can be accessed by calling (855) 859-2056 and using the conference ID 52839526 or by visiting the company’s website at www.windstream.com/investors.