"We have spent considerable time over the past year evaluating strategic alternatives and believe this plan offers the best potential outcome for both our wireless and wireline businesses," said James A. Hyde, CEO of NTELOS Holdings. "Both our wireless and wireline businesses generate strong cash flows and have talented management teams in place. With this separation each will be better positioned to leverage their distinct competitive strengths, manage their operations and capital investments, and pursue growth strategies to enhance shareholder value."
Hyde will continue to serve as CEO and president of wireless and will serve in these capacities for The New Wireline Company for a transition period following the separation. Conrad J. Hunter will continue to lead the wireless operations and will be named chief operating officer for the wireless business. Michael B. Moneymaker will continue to serve as chief financial officer for wireless and will lead the support functions during the transition period.
Following the spin-off, NTELOS Holdings Corp. will be composed of wireless operations, including a retail business providing national 3G wireless voice and data services to customers primarily in Virginia and West Virginia, and a wholesale business which generates revenues under an exclusive contract with Sprint Nextel. Under this arrangement NTELOS is the exclusive PCS service provider in its western Virginia and West Virginia service area for Sprint Nextel CDMA wireless customers.
At the end of September, the wireless retail business had 433,698 subscribers representing approximately a 7% penetration of the Company's total covered population. For the last twelve month period ending September 30, 2010, reported wireless revenues and adjusted EBITDA (a non-GAAP measure) were US$406.4 million and US$148.8 million, respectively, before the allocation of approximately US$7 million of other costs that previously had not been allocated to the wireless and wireline operating segments.
NTELOS Holdings debt will be reduced by means of a dividend from The New Wireline Company at the time of the spin-off to a level such that the debt to last twelve months adjusted EBITDA ratio will be less than 3.25 to 1.
UBS Investment Bank is acting as financial advisor and Troutman Sanders LLP is acting as legal counsel to NTELOS Holdings Corp.
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