American Tower To Buy Tower Sites From NII Holdings In Mexico & Brazil

(RTTNews) - Communication tower sites operator American Tower Corp. (AMT) has inked a deal with NII Holdings, Inc. (NIHD) to acquire up to 2,790 towers in Brazil and 1,666 towers in Mexico in two separate transactions, for about $413 million and $398 million, respectively, based on current foreign currency exchange rates. The agreements provide that all payments, including the tower rent, would be made in local currency. American Tower plans to use cash on hand and borrowings under its existing revolving credit facilities to fund the acquisition.

Also, American Tower anticipates that the towers would collectively generate about $149 million in annual run rate revenues and some $55 million in annual Gross Margin and expects the acquisition to be immediately accretive to adjusted funds from operations upon closing. Both Nextel Brazil and Nextel Mexico would leaseback the towers from American Tower for a minimum 12-year initial lease term with additional renewal options thereafter. NII International Telecom S.C.A, an unit of NII based in Luxembourg, would provide certain credit support with respect to the obligations of Nextel Brazil.

American Tower expects to invest nearly $50 million in start-up capital expenditures associated with the two portfolios. The transaction may close in the fourth quarter of 2013.

On the other hand, NII Holdings believes that a majority of the assets sold and leased-back would be accounted for as capital leases. Therefore, the transactions may have a positive impact to OIBDA, but are not expected to materially impact 2013 results.