Consolidated Communications Closes on Stage One of Searchlight Capital Partners’ Investment of $350 million

  • Consolidated Communications (CCI)

MATTOON, IL — Consolidated Communications announced that it has completed the first stage of its previously disclosed investment transaction with an affiliate of Searchlight Capital Partners and the refinancing of its remaining outstanding debt. In connection with the Investment, affiliates of Searchlight have committed to invest up to an aggregate of $425 million in the Company and the initial $350 million of the Investment was completed today.

Investment Structure

The Investment is structured in two stages. In this first stage, Searchlight invested $350 million in the Company in exchange for 8 percent of the Company’s common stock. In addition, Searchlight has received a contingent payment right (CPR) convertible, upon the receipt of certain regulatory and shareholder approvals, into an additional 16.9 percent of the Company’s common stock, and the right to receive an unsecured subordinated note with a principal amount of approximately $395.5 million.

In the second stage Searchlight will invest an additional $75 million and will be issued the note, which will be convertible into shares of perpetual preferred stock of the Company with an aggregate liquidation preference equal to the principal amount of the note at that time. The Company expects to receive FCC approval in mid-2021. In addition, in the second stage and following shareholder approval, the CPR will be convertible into an additional 10.1 percent of the Company’s common stock. Upon completion of both stages, the common stock and CPR issued to Searchlight will represent approximately 35 percent of the Company’s common stock on an as-converted basis.

“We’re very pleased with the strong support from investors and the terms of our refinancing,” said Steve Childers, chief financial officer at Consolidated Communications. “This successful refinancing, combined with the strategic investment, significantly strengthens the balance sheet and aligns with our deleveraging targets. Our new capital structure improves our balance sheet, extends maturities and significantly improves liquidity, all of which provides us with much greater flexibility to support our fiber expansion and growth plan.”


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