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Uniti Group Inc. (NASDAQ:UNIT), currently trading at $4.91 and showing a significant 13.86% decline over the past week, announced Monday that it has completed an internal reorganization following its previously disclosed merger with Windstream, according to a statement based on a Securities and Exchange Commission filing. InvestingPro analysis suggests the stock is currently undervalued, with strong fundamentals including a healthy current ratio of 1.95x and an impressive gross profit margin of 84.86%.
As outlined in the filing, on August 1, Windstream merged with and into Uniti Group Inc., now referred to as "New Uniti," with New Uniti surviving as the parent entity. A wholly owned subsidiary of New Uniti also merged with the former Uniti Group, resulting in Old Uniti, Windstream, and their subsidiaries each becoming wholly owned subsidiaries of New Uniti. According to InvestingPro data, the combined entity maintains strong financial metrics with an EBITDA of $892.63 million for the last twelve months. For deeper insights into the merger’s implications, investors can access comprehensive analysis through InvestingPro’s detailed research reports.
Following the merger, the existing debt of Old Uniti and Windstream remained separate within the new organizational structure. On Monday, Uniti Group LP, the borrower under Old Uniti’s debt, was merged into Windstream Services LLC, the borrower under Windstream’s debt, as part of an internal reorganization. As a result, all existing debt obligations of Old Uniti and Windstream are now held by the same borrowing entity. Additionally, subsidiaries of both companies that previously guaranteed their respective debts now guarantee the combined debt.
To implement these changes, the involved parties entered into supplemental indentures and joinder agreements related to their outstanding senior notes and credit agreements. The Windstream intercreditor agreement and collateral documents were terminated, and Windstream debt parties joined the existing Old Uniti intercreditor agreement and collateral documents. The Windstream revolving credit facility now ranks equally with the other first lien debt of both entities. The company stated that restrictive covenants that previously limited cooperation between Old Uniti and Windstream have been eliminated as a result of the reorganization.
Additionally, on Monday, New Uniti, Old Uniti, certain subsidiaries, and Deutsche Bank (ETR:DBKGn) Trust Company Americas entered into a supplemental indenture for Old Uniti’s 7.50% Convertible Senior Notes due 2027. The filing states that, following the merger, each $1,000 principal amount of these notes can now be converted into 82.7023 shares of New Uniti common stock, reflecting the merger exchange ratio. As of the filing date, $306.5 million aggregate principal amount of these convertible notes remains outstanding. With revenue of $1.18 billion in the last twelve months and analysts expecting sales growth this year, InvestingPro subscribers can access 12 additional key insights about Uniti’s growth potential and financial outlook.
This information is based on a statement included in Uniti Group Inc.’s filing with the Securities and Exchange Commission.
In other recent news, Uniti Group Inc. announced it has completed its transition of incorporation from Maryland to Delaware, a strategic move ahead of its planned merger with a subsidiary of New Windstream, LLC. The company also received final regulatory approval from the California Public Utilities Commission for the merger, which is expected to close after market hours on or around August 1, 2025. TD Cowen has reiterated its Buy rating for Uniti Group, maintaining a price target of $9.00, citing the company’s stable fiber growth and in-line revenue and EBITDA for the first quarter of 2025. Uniti Group has also launched a $600 million senior notes offering, with the proceeds intended for the partial redemption of $500 million of the company’s 10.50% senior notes due in 2028. This offering is subject to market conditions and the securing of at least $550 million in debt financing. The company has issued a notice for redemption scheduled for June 24, 2025. These developments highlight Uniti’s strategic financial maneuvers and operational alignments amidst its ongoing merger activities.
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