Windstream Emerges After Chapter 11 Reorganization

Windstream Holdings declared Monday that it was free from Chapter 11 bankruptcy protection. Windstream, a privately-owned business, has eliminated more than $4Billion in debt and has approximately $2 billion available for future development.

Windstream was established in 2006 as a traditional telecommunications company. Windstream is now a software and communications company.

Tony Thomas, president and chief executive at Windstream, stated that today marks the beginning of a new chapter in Windstream’s growth. He said that the company now has a stronger balance sheet and a solid program of capital investments to expand 1 Gig Internet service into rural America. 

Due to our financial reorganization, we will maintain our product leadership in SDWAN/UCaaS services for business clients. Windstream will also continue to grow and provide reliable services to its clients. This is due to our existing operating momentum as well as our existing shareholders.

After losing a legal battle against Aurelius Capital Management in New York, Windstream operates under Chapter 11 bankruptcy. It was disputed whether Windstream had defaulted in its debts from the spin-off Uniti Group four years ago.

Uniti was provided copper-based network assets by Windstream as part of the separation. Windstream leased these assets back to Uniti to provide its 1.4 million residential and corporate customers in its 18-state footprint.

Uniti’s master agreement had a rent of $659 million per annum. It was due to expire by 2030. Windstream filed a lawsuit. Windstream claimed that Uniti’s relationship had evolved from a leasing arrangement to a financing agreement.

Windstream and Uniti could not agree on the master leasing conditions for several months. Windstream and Uniti were not able to agree on the master lease conditions for several months.

Under the March settlement conditions, Uniti has committed to spending up to $1.75 Billion on growth capital upgrades to Windstream CLECs, ILEC facilities, and “long-term fiber” assets.

Thomas said that about half of Windstream’s Kinetic broadband network would receive 1-gigabit; Uniti has committed to the internet. This is for small businesses and homes. Windstream intends to increase the speed of internet connections.

Windstream made public its agreement with Uniti. It also announced that it had reached an arrangement with Elliott, a hedge fund manager, and other investors to purchase most of Windstream stock. Windstream will pay off a significant portion of its debt and purchase the majority of its stock.

In June, Robert Drain, United States Bankruptcy Court Southern District New York, approved Windstream’s restructuring plans. Windstream was able to reduce its debt by more than $4 billion using the restructuring plan. The restructuring plan included the appointment of creditors to the company’s new board of directors. Elliott Management became Windstream’s largest shareholder. It removed junior bondholders who owed close to $2.4B and converted some senior debt into equity.

Windstream will now serve its residential and corporate clients through three divisions: Windstream Enterprise and Kinetic by Windstream.

“I want to thank our suppliers and consumers for their support throughout the process.” Thomas expressed his gratitude for Windstream’s unwavering commitment to providing essential telecoms services for clients during this unprecedented healthcare crisis.

 

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