NTELOS Holdings Corp. (NASDAQ: NTLS), a leading provider of wireless and wireline communications services (branded as NTELOS) in seven Mid-Atlantic states, today announced that its board of directors has approved the separation of Lumos Networks Corp. (“Lumos Networks”) from NTELOS through a tax-free dividend involving the distribution of all Lumos Networks common stock held by NTELOS to NTELOS stockholders and has also approved a one-for-two reverse stock split of shares of NTELOS common stock immediately prior to the distribution. As a result, the following will occur after the close of business on October 31, 2011:
- NTELOS will effect a one-for-two reverse stock split of NTELOS common stock, immediately prior to the distribution of Lumos Networks common stock to NTELOS stockholders.
- Immediately after the reverse stock split, NTELOS will make the distribution of Lumos Networks common stock to NTELOS stockholders of record as of the close of business on October 24, 2011.
- In the distribution, NTELOS stockholders will receive one share of Lumos Networks common stock for every one share of NTELOS common stock they hold (post the reverse stock split).
NTELOS’s Board of Directors also has considered the post-separation dividend policies for NTELOS and Lumos Networks. The Board currently intends that following the Separation, NTELOS stockholders who retain their Lumos Networks shares will receive, in the aggregate, the same quarterly cash dividend rate of $0.28 per share that existed before the spin-off (or $0.56 per share on a post reverse stock split basis). Following the one-for-two reverse stock split and the distribution of the Lumos Networks stock, NTELOS is currently expected to pay a dividend at the initial rate of $0.42 per share per quarter, payable in January 2012. Lumos Networks is currently expected to pay a dividend at the initial rate of $0.14 per share per quarter, payable in January 2012.