Windstream's journey through the dark tunnel of chapter 11 is now over. Yesterday they company officially completed its financial restructuring, reducing its debt by $4B and starting a new life with access to $2B in new capital. And of course shedding the burden of those pesky public shareholders and getting a new set of private ones.
It has been just over 18 months since the company filed for chapter 11 after losing in court to Aurelius over its earlier spinoff of its fiber assets as CS&L (now Uniti Group). Ultimately, that price has been paid by the company's former shareholders. Operationally things have pretty much gone on as if none of this happened, it was just a matter of rearranging all the details of who owes who what. But that part of things was a bit of a mess, especially when it came to the spun-off assets.
Hence, also celebrating is Uniti Group, whose settlement with Windstream and its former debt holders is now officially in force. That finally removes the cloud of uncertainty the company has been under when it comes to the contract with Windstream that still dominates its finances. Under the re-negotiated agreement, Uniti has taken over additional assets and IRU contracts while sending a combination of cash and stock in the direction of Windstream and its creditors. Uniti has also promised to invest substantial funds into the expansion of the network assets Windstream leases from them.
Now we move into a new era, and it will be interesting to watch how it all works out. Windstream's Enterprise and Wholesale divisions will have more financial flexibility to take their operational cases to market, and Uniti will find it easier to make new deals and investments as well since their own financials don't come with a big 'if' attached. Just what both entities choose to do now that the yoke has been lifted off their shoulders is an open question.
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