Covad Receives $150 Million
Covad Communications (www.covad.com), has announced that it has received $150 million from the previously announced equity transaction with SBC Communications, a huge telecommunications company which holds PacBell, Nevada Bell and Cellular One, among others, as its subsidiaries. The deal is still subject to regulatory approvals.
"The investment underscores the support and growth of the DSL industry," said Charles McMinn, the newly appointed chairman of Covad. McMinn is replacing Robert E. Knowling, who announced his resignation last week after Covad reported disappointing third quarter results.
SBC's purchase of approximately 9.4 million shares of Covad common stock signifies an equity stake of six percent in Covad. This investment increases Covad's cash balance to continue the deployment of its service across a nationwide broadband network that is nearing completion.
On a pro-forma basis for this investment, Covad's September 30, 2000, cash equivalents and short-term investments balance, was over $1.1 billion.
Covad also announced in its third quarter report, it had entered a commercial agreement with SBC for a $600 million guaranteed revenue stream over six years by reselling Covad's national broadband services to businesses and consumers.