Sprint pads cash holdings by $3.1 billion

Masayoshi Son is CEO of SoftBank Group Corp.
Masayoshi Son is CEO of SoftBank Group Corp.

Sprint Corp. announced it is picking up $3.1 billion in cash through two transactions, including its second cellphone sale-and-lease deal involving its parent company, SoftBank Group Corp.

The cellphone sale deal is with a new company that SoftBank set up last year with a number of Japanese banks. In each deal, the new company agreed to buy $1.3 billion worth of cellphones that Sprint owns and had leased to its customers to use. Sprint then leases the phones back from the new company, with no effect on the consumers using them.

Each phone sale-and-lease deal generated $1.1 billion in cash for Sprint, with the Overland Park-based wireless company saying it expects to collect in the second transaction in the coming weeks.

Sprint did the first phone sale-and-lease transaction late last year, with plans for similar but smaller deals roughly every three months.

The other $2 billion in cash that Sprint said it raised came through a financing agreement with Mizhuo Bank Ltd. Sprint said it is an 18-month “bridge financing facility” that adds to its available cash.

Sprint also recently announced a $2.2 billion sale-and-lease arrangement involving wireless network equipment it uses. It also involved a new company set up with SoftBank and others.

Sprint has turned to these sale-and-lease deals as it has found traditional financing sources unavailable. Anticipated borrowing costs are high because Sprint already owes a substantial amount of debt.

Mark Davis: 816-234-4372, @mdkcstar