Powertel Takes Part in Two Strategic Investments
In a separate transaction, Eliska Wireless Ventures I Inc. has agreed to purchase the assets and assume certain liabilities relating to the PCS operations of DiGiPH PCS Inc. for $375 million, subject to certain adjustments. Eliska Wireless Ventures and Powertel intend to enter into a management agreement whereby Powertel will manage the operations of the acquired PCS markets under the control and direction of Eliska Wireless Ventures. This will result in the extension of the Powertel brand name and footprint into the current DiGiPH markets.
These transactions are currently expected to close in the fourth quarter of 2000, subject to regulatory approvals and certain other closing conditions.
Eliska Wireless Ventures I will be headquartered in Mobile, AL. The properties are contiguous to Powertel's current footprint in the Southeast, include some popular tourist destinations located along the gulf coast of Alabama, Florida, and Mississippi.
Sonera Transaction Details
Through a subsidiary, Sonera has agreed to purchase $125 million of Powertel common stock at $71.80 per share, which equals the 20-day average closing price prior to May 30, 2000. Including the 100,000 shares of Powertel's Series A Convertible Preferred Stock currently held by Sonera, Sonera will own 6,367,716 million shares of Powertel common stock, or 11.8%, on a fully-diluted basis.
Eliska/DiGiPH Details
- Powertel will invest $125 million in Eliska Wireless Ventures I Inc. in exchange for all of its Series A Preferred stock, giving Powertel a 49.9% ownership interest and approximately 25% voting interest in the new venture.
- Sonera (through a subsidiary) will also invest $75 million in Eliska Wireless Ventures I Inc. in exchange for all of its Series B Preferred Stock, giving Sonera a 30.1% ownership interest and approximately 15% voting interest in the new venture.
- Eliska Wireless Investors I L.P. has agreed to invest $50 million in Eliska Wireless Ventures I Inc. in exchange for all of its Common Stock, giving Eliska Wireless Investors a 20% ownership interest and approximately 60% voting interest in the new venture.
- Eliska Wireless Ventures I Inc. has agreed to pay $375 million for the DiGiPH assets, including the assumption of certain debt.
- Powertel will enter into a management agreement with Eliska Wireless Ventures I Inc. for management, technical, and consulting services. Powertel will work with Eliska Wireless to market its services under the Powertel brand name, expand distribution channels, and increase network coverage in the DiGiPH markets.
- Powertel initially established a strategic relationship with Eliska Wireless Inc. in 1999 to help fund Eliska's purchase of the 15 MHz C-block PCS licenses in Knoxville and Kingsport, TN. DiGiPH Facts and Operating Statistics DiGiPH Communications Inc. (DiGiPH) provides wireless personal communications services using GSM technology in portions of Alabama, Florida, and Mississippi. The company's licenses encompass a territory with a population of approximately 2.4 million people.