Centennial Communications Corp. said it has entered into a definitive agreement to sell its Puerto Rico cable television operations to Hicks, Muse, Tate & Furst Inc. for $155 million in cash. Proceeds from the sale will be used to fund the buildout of wireless licenses in Lansing and Grand Rapids, Mich., which Centennial recently acquired from AT&T Wireless Services Inc. as well as other capital requirements.
Centennial noted its cable television operations serve approximately 73,000 subscribers and pass more than 300,000 contiguous homes in southern and western Puerto Rico. It expects the deal to close in early 2005. Centennial added that the cable television properties accounted for less than 5 percent of its total consolidated net income before income tax expense, interest expense, loss of impairment or disposition of equipment, and depreciation and amortization.
“This has proven to be a good time to monitize our cable television business, and this transaction accelerates the de-leveraging of the company,” said Michael Small, chief executive officer of Centennial.
The sale followed an announced review of its cable television assets in May of this year as well as a previous review in 2002 that resulted in Centennial deciding to keep the operations as they provided the “highest value for shareholders” at the time. Centennial’s stock was trading up more than 5 percent early Tuesday at $5.55 per share.
