Uniti Corp. postpones 4Q earnings report amid Windstream bankruptcy fallout

by Wesley Brown ([email protected]) 384 views 

Little Rock-based Uniti Corp. has postponed its fourth quarter and yearly financial results scheduled for Thursday (Feb. 28) as company officials assess the impact of the Chapter 11 petition by its former parent company, Windstream Holdings, Inc. earlier this week.

Uniti’s year-end earnings report is now scheduled for no later than March 18, the same deadline set by Windstream officials nearly two weeks ago after U.S. District Judge Jesse Furman for the Southern District of New York ruled Windstream violated bond agreements after splitting off Arkansas’ first publicly held real estate investment trust in April 2015.

That federal lawsuit arose from challenges by Aurelius Capital Management and U.S. Bank National Association that the spinoff was invalid under the terms of a debt exchange offer and consent solicitations in respect to senior notes issued by its Windstream Services LLC to its so-called “sale and lease back” deal to spinoff CS&L, now known as Uniti Corp. The court in its ruling awarded Aurelius and the other winning parties a $310 million judgment.

Windstream announced Monday that its holding company and subsidiary, Windstream Services LLC, had filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Chapter 11 bankruptcy allows a business to file a reorganization plan for its debt over a 120-day period.

Despite both companies’ shares plummeting to yearly lows this week amid the bankruptcy fallout, Uniti and Windstream will not have to answer questions from Wall Street analysts and investors until next month’s earnings calls. Both Little Rock companies trade publicly on the Nasdaq stock exchange.

On Tuesday, Windstream received “first day” approvals from the U.S. Bankruptcy Court in New York to access up to $400 million of its $1 billion in debtor-in-possession financing from Citigroup Global Markets Inc. Windstream is Uniti’s largest customer and is obligated for more than 60% of the spinoff’s revenues due to a landlord-tenant, lease-back agreement.