Dish Network struck a deal to sell its spectrum and approximately 120,000 Boost Mobile prepaid customers in Puerto Rico and the US Virgin Islands to Liberty Latin America in a bid to free up capital ahead of maturing debt.
The aggregate asset purchase price of $256 million will be paid in four annual instalments commencing on the closing date, which is expected in 2024.
Tom Cullen, EVP of corporate development for Dish Network, stated on its Q3 earnings call the markets in Puerto Rico and the US Virgin Islands were very competitive and subject to weather challenges.
“The build out would be expensive so we thought it best to enter into a transaction which gives Liberty a much more competitive spectrum position,” he stated, adding the deal would enable Dish Network to channel the funds “back into the continental US”.
He noted Dish Network would reap significant capital savings from not having to expand the networks, which he stated were expensive to build and have higher than average OPEX.
Reuters reported Dish Network has about $21 billion of debt, with $5 billion coming due in 2024 and 2025.
The operator issued $1.5 billion-worth of senior notes secured by its spectrum in January, stating the proceeds would go towards “general corporate purposes”, including wireless infrastructure.