Broadwing Sells Broadband Biz

CINCINNATI -- Broadwing Inc. (NYSE: BRW) today announced that it has reached an agreement to sell the assets of its broadband business, Broadwing Communications Services Inc., including the Broadwing name, to privately held C III Communications, LLC, for $129 million in cash. Under terms of the agreement, C III Communications will assume certain long-term operating liabilities of Broadwing Communications Services Inc., will continue providing services to customers, and will retain current employees. The asset purchase agreement was signed after approval by the companies' boards and is subject to customary closing conditions, including approval by the Federal Communications Commission and relevant state public utility commissions. C III Communications' investors include Cequel III, LLC, an investment and management company based in St. Louis, Missouri, and Corvis Corporation, a telecommunications equipment provider based in Columbia, Maryland. Broadwing Inc. will retain a minority interest in C III Communications. Cequel III will take the lead in supervising the management of the new company, which will continue to do business under the Broadwing name. "This announcement represents a significant step forward in our five-point restructuring plan, especially given our commitment to strengthening our financial position and reducing debt," said Kevin Mooney, Broadwing's Chief Executive Officer. "We continue to work toward other key objectives, including renegotiating our current bank credit facility and closing our previously announced $350 million financing commitment." Broadwing Inc.'s local communications subsidiary, Cincinnati Bell, will remain a customer of Broadwing Communications Services Inc. under its new ownership. Cincinnati Bell will continue to market Broadwing Communications' broadband products to business customers and sell long distance services, under the Cincinnati Bell Any Distance brand, to residential and business customers in the Greater Cincinnati market. "The assets of Broadwing Communications will provide C III Communications with a significant opportunity to bring the benefits of a nationwide next-generation telecommunications network to our growing number of enterprise and carrier customers. The unique advantages of the world's first intelligent, all-optical switched network will also enable the company to develop new market opportunities in the telecom, cable and wireless industries," said Jerald L. Kent, President and Chief Executive Officer of Cequel III. "With a newly capitalized and debt-free structure, we will have the opportunity to greatly expand market presence, while retaining the employees and continuing to provide unparalleled, uninterrupted service to our customers. It is a sound strategic fit with the investments Cequel III has made to date and those we hope to make in the future." "We believe this is an attractive investment that offers promising returns and financial diversification," said Lynn Anderson, Senior Vice President, Chief Financial Officer and Treasurer, Corvis Corporation. "Corvis offers industry-leading, next-generation optical networking solutions to global carriers." The assets acquired by C III Communications include 18,700 recently completed route miles of the latest generation of fiber optic cables; the industry's only true intelligent, all-optical switched network; a state-of-the-art network operations center; and all the other network elements necessary to provide state-of-the-art integrated and managed broadband telecommunications services. Through these assets, Broadwing Communications Services Inc. provides managed network solutions and broadband telecommunications services to more than 1,000 corporate customers in 137 of the top 150 markets in the United States; broadband transportation services to major telecommunications carriers; and long-distance telecommunications services to more than 150,000 customers. "For our customers and employees, this transaction provides continuity and consistency," said Bob Shingler, President, Broadwing Communications. "Our expanding set of leading business and carrier accounts can be assured that Broadwing employees will continue to provide the high-quality products and services they have come to expect, backed by our unparalleled commitment to customer service and support." Broadwing Inc.