Atlantic Tele-Network announced that its bankers have approved a new $150 million term loan to finance Atlantic’s pending acquisition of Alltel wireless assets, by way of Verizon Wireless.
Verizon was required to divest of these Alltel assets, which includes wireless infrastructure and subscribers in Georgia, Idaho, Illinois, North Carolina, Ohio, and South Carolina, to gain regulatory approval for their purchase of the former Alltel Wireless.
Besides the new $150 million term loan, Atlantic announced it has renegotiated other aspects of its senior secured credit facility, including a second, $73.9 million term loan–the same amount as a term loan the company is already carrying on its books–and a $75 million revolving loan, which was also available under its previous credit facility.
Atlantic management intends to borrow the entire $150 million term loan in order to complete the purchase of Alltel’s wireless assets, which it foresees completing during 1Q this year if certain regulatory issues are cleared. EBITDA, the standard measure of free cash flow, will be crimped for the entire year as a result, though they are expected to gradually improve during that period to reach a “more normalized” 20%-30% by 2011, management said.
Atlantic puts the stable subscriber base of the former Alltel assets at more than 800,000 post-paid and pre-paid subscribers and expects annual service revenues–which exclude handset and equipment sales–at approximately $450-$500 million for an initial 12 months.
“We are moving ahead to ensure that we provide our customers with a seamless transition once the Alltel acquisition is completed, which we expect will be within the first quarter of this year,” Atlantic CEO Michael Prior said in a news release.
