SpectraSite to File Bankruptcy Plan
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CARY, N.C. (AP) _ SpectraSite Holdings Inc., one of the largest cell-phone tower operators in the country, will file a prepackaged bankruptcy reorganization plan to wipe out $1.8 billion in debt in one of the largest bankruptcy cases in state history.
SpectraSite Holdings said it will file for bankruptcy protection by Nov. 15 under an agreement reached with bondholders. Reorganizing the holding company, which has no employees or customers, is not expected to hurt SpectraSite Communications Inc., the subsidiary that operates the company’s towers, spokeswoman Tabitha Zane said Thursday.
``It’s business as usual. We will continue to be in the tower business,″ Zane said.
SpectraSite’s bankruptcy filing would be the largest by a North Carolina-based public company, said Chris Stuttard, editor of BankruptcyData.com, a Boston company that tracks business bankruptcies.
Shares in the company fell 4 cents to close at 11 cents on the Nasdaq Stock Market.
Companies holding two-thirds of the Cary-based company’s bonds said they would forego repayment in exchange for all SpectraSite’s stock when it emerges from Chapter 11.
Shareholders will lose their investment, but will get the option to buy 5 percent of the shares in the new company if its market value reaches $1.5 billion. The company expects to emerge from Chapter 11 quickly because most issues were resolved before the filing.
``We look forward to emerging from Chapter 11 as a financially stronger company,″ chief executive officer Steve Clark said.
The company’s management team and board of directors would stay intact at least until the company emerged from Chapter 11, when a new five-member board that includes Clark would be selected by the company’s biggest note holders.
SpectraSite accumulated about $2.6 billion in debt as it raced to build towers across the country that could supply transmission capacity to mobile-phone companies. SpectraSite became unable to keep up with its debt load when cell phone demand dropped and carriers put expansion plans on hold.
A plan by New York investment firm Welsh, Carson, Anderson & Stowe to purchase most of the bonds at a steep discount fell apart earlier this year when bondholders sued to stop it.
SpectraSite owns or manages about 20,000 sites and nearly 8,000 towers.
SpectraSite Communications Inc.: www.spectrasite.com