Subject: [NEXTEL-1] Boca Raton, Fla., Cell Tower Builder to Sell at Least 679 to New Jersey Firm

From: Marcel <[email-masked]>
Date: Tue, 25 Mar 2003 13:48:11 -0500

Boca Raton, Fla., Cell Tower Builder to Sell at Least 679 to New Jersey Firm
Source: The Miami Herald
Publication date: 2003-03-19

Mar. 19--SBA Communications, a buyer and builder of communications
towers, moved to pare its enormous debt load by entering into a deal to sell
up to 21 percent of its towers.

The Boca Raton company agreed to sell 679 or 801 towers, representing
most of its assets out West, to AAT Communications of Islin, N.J., for $160
million or $203 million. The sale is expected to be completed in stages from
May 9 to Sept. 30.

SBA has been exploring ways to improve its balance sheet.

"We determined that the quality of our towers afforded us attractive
opportunities to sell some of our assets and reduce debt," Jeffrey A.
Stoops, SBA's president and chief executive, said in a statement.

SBA leases its towers to wireless-phone service providers, such as Sprint
PCS and Nextel. The balance of its towers are in the eastern third of the
United States.

The firm has no other deals on the horizon, according to Pamela J. Kline,
SBA vice president of capital markets.

"We're contemplating a bunch of options," Kline said, declining to discuss
them.

"The pressure's off, with this being such a large transaction," said Marcus
Jones, a senior analyst with Moody's Investors Service, the New York
credit-rating firm. "It looks like the purchaser is paying full price, which is
good for SBA. Their cash-flow growth has been slowing, and their debt has
been growing."

Moody's last quarter lowered the rating on SBA's bonds two notches, to
Caa2, near the bottom of the firm's ratings.

In the late 1990s, SBA went on a buying and building binge that increased
the number of its towers from 51 in 1997 to its current 3,877. But cellphone
growth eventually slackened, crimping companies in the telecom industry.

SBA's increased debt load served as a double whammy. As of Sept. 30, its
debt totaled about $1.1 billion. Its debt-to-equity ratio has grown to more
than 5-to-1, versus slightly more than half at the end of 2000.

The deal, SBA's first large-scale sale, follows a restructuring that began in
2001 and that has included trimming the number of towers SBA had planned
to build and acquire.

The company bought or built 186 towers in the first nine months of 2002,
compared with 1,344 for all of 2001.

It also closed 40 offices and eliminated about 570 jobs. The company once
had about 1,350 employees.

The 801 towers that SBA could sell to AAT contributed about $3.9 million,
or 14 percent, of SBA's gross profit before expenses in the third quarter.

The company lost $31.7 million on $67 million in revenue for the quarter.
Overall, SBA's combined losses top $450 million.

SBA's stock has tumbled with the weakening telecom industry. From a high
of $56.63 in June 2000, the stock has fallen as low as 20 cents. It closed at
80 cents Tuesday, up 6 cents.

AAT Communications, with more than 6,000 towers owned or managed, is
the largest privately held provider in the industry, according to company
spokesman Pete Abel.

AAT is managed by Cequel III, a St. Louis management company. Jerald L.
Kent serves as chief executive of both companies.

"They basically went looking for companies that would be interested in
selling towers to them," Abel said. "SBA was one that raised their hand and
said they would be interested."

-----

To see more of The Miami Herald -- including its homes, jobs, cars and
other classified listings -- or to subscribe to the newspaper, go to
http://www.herald.com.

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