LAKE CHARLES, La.-Sprint PCS affiliate US Unwired Inc. reported that it reached an agreement with the board of directors of subsidiary IWO Holdings Inc. and IWO’s senior lenders for US Unwired to continue to manage IWO through 2005 with an IWO option to extend the agreement through 2006.
The agreement also allows US Unwired to charge a fixed fee for operating IWO plus additional fees for assisting in IWO’s restructuring. In addition, US Unwired has the opportunity to earn bonuses for meeting pre-set operating targets or lending managerial support for a successful restructuring.
Either party can terminate the agreement, though IWO would have to pay a termination fee to exercise its rights while US Unwired would be obligated to perform pre-defined transition services should it terminate the deal.
“We are very pleased, despite that IWO’s financial condition will likely force it to file bankruptcy protection soon, that the IWO Holdings board of directors and its senior lenders have recognized the tremendous progress we have made with the company,” said Robert Piper, president and chief executive officer of US Unwired. “We have worked hard to improve IWO’s operations and preserve its cash.”
US Unwired acquired IWO in April 2002 for approximately $460 million, adding the fellow Sprint PCS affiliate’s Northeast footprint to US Unwired’s Southeast market focus.
