Uniti Delays Q4 Release Due to Windstream Chapter 11; Lease Payment Seen Key
Uniti Group put off Thursday's Q4 report to further assess impact of Windstream's bankruptcy, Uniti's biggest client (see 1902250058). Uniti expects to release the results and provide a business update no later than March 18, it said Wednesday. "This is…
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clearly an evolving situation," Wells Fargo's Jennifer Fritzsche wrote investors Thursday. "Given that WIN's lease payment (of ~ $650MM) represents the majority of UNIT's revenue -- what happens to this lease payment during the WIN bankruptcy process?" She said the lease payment provides 69 percent of Uniti's revenue. The analyst noted her January downgrade of its shares "did not see a simple path for UNIT to fund its ~$430MM annual dividend from its own internally generated cash flow," and that was before Windstream suffered a "somewhat unexpected" court setback. A U.S. district court judge sided with bondholder Aurelius Capital Management in its dispute over Windstream's spinoff of telecom assets into Uniti and leaseback arrangements (see 1902190043).