Dallas, Texas 07/01/2015 (Financialstrend) – Cincinnati Bell Inc. (NYSE:CBB) has offloaded a third of its stake in its spun off data center CyrusOne as it continues to look for funds to pay down its debt. The transaction involves the company selling off 4.3 million operating partnership units for $28.41. The company should raise $122 million from the transaction.
CyrusOne Public Offering
CyrusOne plans to raise money for buying the operating units by carrying out a public offering of 11.3 million shares. Cincinnati Bell Inc. (NYSE:CBB) may sell an additional 1.7 million operating units as part of the deal, a move that will require CyrusOne to raise an additional $48 million to cover for the same.
This is the third time that Cincinnati Bell Inc. (NYSE:CBB) has opted to offload its stake in CyrusOne as it looks for funds to relieve itself of the debt pressures. The company started with about 68% in operating partnership stakes in Cyrus one, which were slashed to 44% in 2014 on the sale of 16 million operating units. Early in the year the company offloaded another 14.3 million units for $426 million that reduced its stake in Cyrus one to 22%.
The selloff should reduce Cincinnati Bell Inc. (NYSE:CBB) risks associated with owning a large equity investment while increasing its operational flexibility for better management of the capital structure.
Growing Cash Flows
The 4.3 million operating units sell off should slash Cincinnati Bell stakes in CyrusOne to 13.7% as the company continues to slash its debt that was about $1.46 billion as of April. The company is banking on its investments in strategic products, high-speed Internet offerings as well as higher managed service demand to generate significant cash flows.
Entertainment and communication segments are Cincinnati Bell Inc. (NYSE:CBB) Prime growth drivers thanks to the roll out of fiber networks across the country. Strategic revenues, which account for 50% of the company’s total recurring revenues, grew by 22% in the last quarter with the momentum poised to continue in the current quarter.