NII Selling Brazilian, Mexican Towers to American Tower

Reston, Va.-based NII Holdings (NASDAQ: NIHD  ) is monetizing some assets.

On Friday, NII announced it has agreed to sell, and then lease back, approximately 2,790 cell phone towers in Brazil, and 1,666 towers in Mexico, to buyer/lessor American Tower Corp. (NYSE: AMT  ) . The cell phone towers in question belong to NII subsidiaries Nextel Brazil and Nextel Mexico, respectively. Their sale, which will take place in separate transactions, should result in lump-sum payments to NII of $413 million and $398 million, respectively.

Subsequently, Nextel Brazil and Nextel Mexico will lease back the towers from American Tower, signing leaseback agreements obligating them to lease the towers for at least the next 12 years, with the option to extend their leases even longer than that.

NII CEO Steve Shindler characterized the sale-leaseback as a means of "unlocking the value of a significant portion of our tower assets while raising additional liquidity," and said that NII intends to "use the proceeds from the transactions to support the continuing investments in our next generation network deployments in our largest markets, Brazil and Mexico."

American Tower said it expects to invest approximately $50 million in start-up capital expenditures associated with the two portfolios, which include towers in and around major population areas and along major highways. "On average, the towers have a tenancy ratio of just over one tenant per tower," said American Tower, "with Nextel Brazil or Nextel Mexico as the primary tenant, providing significant opportunities for future site leasing growth."

Both sales are expected to close in Q4 2013.

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