Consolidated Communications Receives State PUC Regulatory Approvals for Searchlight Capital Partners Investment

Fully funded fiber expansion plan to bring superior, broadband services to 1.6 million customers, more than 70 percent of company’s service area, by 2025.

  • Consolidated Communications

 

MATTOON, Ill.--Consolidated Communications has received all required state Public Utilities Commission (PUC) regulatory approvals necessary for the conversion of the contingent payment right (the “CPR”) issued by the Company to an affiliate of Searchlight Capital Partners, L.P. (“Searchlight”) in connection with the previously announced investment by Searchlight in the Company (the “Investment”). By securing all required state PUC regulatory approvals, the CPR has now converted into an additional number of shares of the Company’s common stock, which together with the shares issued to Searchlight at the completion of the first stage of the Investment on Oct. 2, 2020, constitutes approximately 24.5 perednt of the Company’s outstanding shares.

“Our fully funded, fiber expansion plan is off to a fast start,” said Bob Udell, president and chief executive officer at Consolidated Communications. “We are pleased to have secured shareholder as well as the required state regulatory approvals and remain on track to close on the full Searchlight investment following FCC approval expected later this year. This partnership is about driving long-term value for all Consolidated shareholders. The transformation of our business is well underway and will bring significant benefits to consumers, commercial and carrier customers across our service areas.”

The Investment is structured in two stages. In the first stage, which was completed on Oct. 2, 2020, Searchlight invested $350 million in exchange for 8 percent of the Company’s common stock. Pursuant to the terms of the transaction, Searchlight also received the CPR and the right to receive an unsecured subordinated note with a principal amount of approximately $395.5 million (the “Note”).

In May 2021, the Company received overwhelming shareholder approval for all proposals related to the Investment. The Company has also secured all required state PUC regulatory approvals, as well as approval under the Hart-Scott-Rodino Act, for the Investment.

The closing of the second stage of the Investment (the “Second Closing”) is conditioned on the receipt by the Company of approval of the Federal Communications Commission (the “FCC”). At the Second Closing, Searchlight will invest an additional $75 million in the Company and will receive an additional 15,115,899 shares of the Company’s common stock. In addition, the Note will also convert into shares of perpetual preferred stock of the Company with an aggregate liquidation preference equal to the principal amount of the Note plus accrued interest at the time of conversion. The Company expects the Second Closing to occur later this year, subject to the receipt of FCC approval. Following the Second Closing, Searchlight will hold approximately 35 percent of the Company’s common stock on an as-converted basis.

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