SpectraSite Reorganizing Under Ch. 11

The planned reorganization affects only SpectraSite Holdings Inc. and not SpectraSite Communications Inc. or any of SpectraSite Communications' subsidiaries, the company says in a prepared statement detailing its third-quarter performance.

SpectraSite owns, manages or leases antennae sites on 7,999 towers, building rooftops and in-building telecommunications access on commercial real estate, network planning and wireless tower construction.

Among the office buildings SpectraSite has serviced is the 376,000-sf, two-year-old Glenridge Highlands Two at Windward and Westside Parkways, former headquarters of locally based Cingular. SpectraSite's client roster includes SBC Communications Inc., Cingular, AT&T Wireless, Nextel and Sprint PCS.

Hit by a downturn in the telecommunications industry, SpectraSite was unable to pay $10.8 million in interest to a consortium of 80 lenders on its $200 million of 10 ¾ senior notes that matured in 2010, the company says in its financial report.

The payments were due Sept. 15. The company had until Oct. 15 to pay before the notes were called in as a default.

But the company contends in its Nov. 12 filing with the Securities and Exchange Commission the restructuring plan is "not currently expected to constitute an event of default or otherwise adversely affect SpectraSite Communications Inc.'s ability to draw on the credit facility, which will continue to be serviced from operating cash flow by SpectraSite Communications Inc."

SpectraSite Holdings acknowledges in its SEC filing that it is a holding company "whose only significant asset is the outstanding capital stock of its subsidiary, SpectraSite Communications." The company says SpectraSite's "only source of cash to pay interest on and principal of our indebtedness is distributions from SpectraSite Communications."

For the nine months ended Sept. 30, cash flows from operating activities were $1.5 million versus $16.4 million in the comparable 2001 period.

SpectraSite's biggest deal to date was its Aug. 25, 2000 subleasing transaction on 3,900 towers with affiliates of SBC Communications Inc. in exchange for $982.7 million in cash and $325 million in common stock. The 14.3 million shares were valued at the time at $22.74 per share.

SpectraSite and SBC co-manage and maintain the towers and have the right to co-locate tower tenants. SBC is an anchor tenant on all of the towers and pays a monthly fee per tower of $1,470 that is adjusted annually, SpectraSite's SEC filing discloses.

SpectraSite also had agreed to build additional antennae towers for Cingular, an SBC affiliate, through 2005 but the contract was terminated May 15, 2002.