IHeartMedia has closed on the first batch of towers it’s selling to Vertical Bridge Holdings. The total sale involves 411 towers and related assets for up to $400 million, we reported.
IHeartMedia has told the Securities and Exchange Commission its first closing involves 367 tower sites and related assets for approximately $369 million.
The media company is now a tenant, having signed lease agreements with Vertical for the 367 sites. It tells the SEC its annual tower lease payments will total some $20 million. That means iHeartMedia will lose some $10.7 million in annual tenant revenue.
However, the sale also means iHeart’s direct operating expenses of approximately $3.3 million annually are reduced and there’s an annual cash impact of $28.2 million. The initial lease deals cover 15 years followed by three additional periods of five years each.
The remainder of the tower sale closings will occur as site “defects” are fixed, iHeartMedia tells the SEC.
When the sale was announced late in 2014, iHeartMedia President/CFO Richard Bressler said the transaction would allow the broadcaster to “optimize our balance sheet and maximize liquidity.”