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Funds to help U.S. operator pay down hefty debt while continuing its aggressive mobile strategy.
Sprint this week signed a deal to sell and leaseback certain network assets that will provide it with US$2.2 billion (€1.93 billion) in cash.
The U.S. operator is selling the assets to a newly-created group of entities collectively called Network LeaseCo, which will use them as collateral to raise funds from external investors, including Sprint’s parent company Softbank.
These assets, which include equipment deployed on cell towers and carry a net book value of $3 billion, will be leased back to Sprint.
Wednesday’s announcement follows a similar move in November 2015, when Sprint raised $1.1 billion via the sale and leaseback of certain high-end mobile devices to a newly-formed group of investors called Mobile Leasing Solutions.
"Sprint and Softbank have worked together again to create a unique structure that provides Sprint with an attractive source of capital," said Sprint CFO Tarek Robbiati, in a statement on Wednesday.
"This transaction is an important first step in addressing upcoming debt maturities and allows us to stay focused on our corporate transformation, which involves growing topline revenues and aggressively taking costs out of the business to improve operating cash flows," he said.
Indeed, Sprint has repositioned itself as a value player in the U.S. mobile market, hoping to expand its customer base by undercutting rivals. At the same time it is in the midst of a $2.5 billion cost-cutting drive, which includes an unspecified number of redundancies.
Its debt totalled $33.75 billion at end of December 2015, and $3.68 billion of debt is due to mature in fiscal 2016, which runs to 31 March 2017.
