Uniti Group Inc. (NASDAQ:UNIT) noticed its shares tanked, after the Arkansas-based company issued a statement today regarding last week’s unfavorable court ruling against Windstream Services, LLC., a subsidiary of Windstream Holdings, Inc., Uniti’s largest customer.
The ruling, announced by Windstream last Friday, relates to Windstream’s 2015 spinoff of certain telecommunications network assets into Uniti, and Windstream’s agreements with bondholders. Uniti was not a party to this litigation.
Uniti CEO Kenny Gunderman commented, "It is our understanding that Windstream intends to take action and pursue all available options. The validity of our master lease agreement with Windstream was not impacted by the ruling, and access to our network remains critical to Windstream’s operations and its ability to serve its customers."
Uniti, an internally managed real estate investment trust, is engaged in the acquisition and construction of mission critical communications infrastructure, and is a leading provider of wireless infrastructure solutions for the communications industry.
As of September 30, 2018, Uniti owns 5.4 million fiber strand miles, approximately 850 wireless towers, and other communications real estate throughout the United States and Latin America
Both companies took a beating after the market closed on Friday following news that the United States District Court of the Southern District of New York ruled in favor or Aurelius, a hedge fund that owns a majority of Windstream’s 6.375% 2023 Senior Notes, regarding whether or not Windstream, in spinning off Uniti and leasing back assets from it, breached their indenture.
Shares in Uniti stumbled $7.74, or 38.7%, to $12.24.
