Sprint to Sell, Lease Back Some Network Assets

A pedestrian walks by a Sprint Corp. store in Pasadena, Calif. On Wednesday, the wireless carrier said it would sell some network assets and then lease them back in an effort to shore up its cash position. ENLARGE
A pedestrian walks by a Sprint Corp. store in Pasadena, Calif. On Wednesday, the wireless carrier said it would sell some network assets and then lease them back in an effort to shore up its cash position. Photo: Mario Anzuoni/Reuters

Sprint Corp. S 2.57 % said Wednesday it would take another step to address its cash crunch by selling some network assets and leasing them back.

This is the latest move by Sprint, which has been losing customers and money for years, to shore up its cash situation. The company said it would get a $ 2.2 billion infusion by selling network equipment to certain entities, known together as Network LeaseCo.

The newly formed Network LeaseCo. would be backed by external investors, including Sprint parent SoftBank Group Corp. 9984 0.15 % Network LeaseCo. would lease the equipment it purchased back to the carrier.

The transaction essentially serves as a loan that will cost Sprint less than tapping debt markets, freeing up much-needed resources for network investment and operations.

“Sprint and SoftBank have worked together again to create a unique structure that provides Sprint with an attractive source of capital,” said Sprint Chief Financial Officer Tarek Robbiati.

Sprint expects the $ 2.2 billion of cash proceeds generated by this transaction to be repaid in staggered, unequal payments through January 2018.

The network assets involved in the transaction have a net book value of about $ 3 billion, according to Sprint, and consist primarily of equipment located at cell towers.

In November, the company had made a more unconventional move to boost its cash pile, saying it would get a $ 1.1 billion cash infusion through a deal to sell certain handsets and other devices it has leased to its customers.

Write to Ezequiel Minaya at [email protected]


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