Following the transaction, Sprint has downgraded its revenue outlook. The company now expects fiscal year 2015 Adjusted EBITDA to be between $6.8 billion to $7.1 billion against $7.2 billion to $7.6 billion planned earlier.
The US-based Mobile Leasing Solutions is formed by a group of equity investors including SoftBank. SoftBank is the majority owner of Sprint, the fourth largest wireless operator in America.
The cash proceeds are part of approximately $1.2 billion in total consideration that are expected to be exchanged for approximately $1.3 billion of leased device assets. The cost effective transaction, which is expected to close in the first week of December, will improve Sprint’s liquidity position.
The transaction also establishes a repeatable structure for mitigating the working capital impacts associated with leasing devices to Sprint’s customers.
Sprint CFO Tarek Robbiati said: “Providing mobile devices to customers is the biggest use of cash in the carrier model and with this new structure we have more closely aligned Sprint’s cash flows with those associated with leasing devices to our customers.”
Mobile Leasing Solutions has secured debt financing from lenders including international banks and leasing companies.