Yesterday, Pacific Gas and Electric Company (PG&E) announced that it has entered into an arrangement with SBA Communications Corporation (Nasdaq: SBAC) to sell its license agreements with wireless providers that attach their equipment to certain electric transmission towers and other utility structures. The deal also allows the SBA subsidiary to continue to market and sublicense access to the towers and structures to additional wireless providers and PG&E will receive a portion of that future revenue.
The sale of these licenses, which apply to over 700 towers, is expected to generate $973 million in initial proceeds, subject to customary closing adjustments. PG&E is not selling any transmission towers as part of this transaction.
“This transaction adds a significant portfolio of high quality, exclusive locations to our outstanding existing US macro tower portfolio and SBA expects these assets to generate approximately $39.5 million in Tower Cash Flow in their first full year in our portfolio,” said Jeff Stoops, SBA President and CEO.
PG&E is also entering into a strategic relationship with SBA, through SBA’s wholly owned subsidiary, to sublicense and market equipment at additional attachment locations on up to 28,000 transmission towers across PG&E’s extensive network. Through this arrangement, PG&E will receive a portion of future revenues from these sublicensed equipment attachment locations.
Overall, PG&E expects the proceeds from this agreement to help further reduce its financing needs and strengthen its financial position while also benefiting customers, who will receive a significant portion of the sale proceeds in the form of lower monthly bills as well as a portion of any future revenues from additional attachment locations.
“As 5G network deployments are now a reality,” Stoops said, “we are excited to use our vast experience and industry leading position in order to facilitate the future additional use of these assets by wireless service providers for the collective benefit of the wireless industry, PG&E and SBA. We are also particularly pleased about the opportunity to work closely with PG&E over the coming years to maximize wireless deployments across their extensive network of transmission towers.”
“When we emerged from Chapter 11, we made a commitment to achieve financial stability and bolster our overall financial health and we’re delivering on that objective. Strategically selling non-core assets like these is one way we’re continuing to follow through on that commitment, reduce our financing needs and strengthen our balance sheet,” said Chris Foster, PG&E Interim Chief Financial Officer.
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