Sec Form 13D Filing - Searchlight III CVL L.P. filing for Consolidated Communications Holdings Inc. (CNSL) - 2021-12-08

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 2)*

Consolidated Communications Holdings, Inc.

(Name of Issuer)

Common Stock, $0.01 par value

(Title of Class of Securities)

209034107

(CUSIP Number)

Searchlight III CVL, L.P.

c/o Searchlight Capital Partners, L.P.

745 5th Avenue – 27th Floor

New York, NY 10151

Attention: Nadir Nurmohamed

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

December 7, 2021

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box.  ☐

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

This Amendment No. 2 to Schedule 13D (this “Amendment No. 2”) amends and supplements the statement on Schedule 13D jointly filed by Searchlight III CVL, L.P., a Delaware limited partnership (“Searchlight III CVL”) and Searchlight III CVL GP, LLC, a Delaware limited liability company and the general partner of Searchlight III CVL (“Searchlight III CVL GP” and, together with Searchlight III CVL, the “Reporting Persons”), with the Securities Exchange Commission (the “Commission”) on October 13, 2020 (as it may be amended from time to time, this “Schedule 13D”), relating to the shares of common stock, par value $0.01 per share (“Common Stock”), of Consolidated Communications Holdings, Inc. (the “Issuer”). Initially capitalized terms used in this Amendment No. 2 that are not otherwise defined herein shall have the same meanings attributed to them in the Schedule 13D. Except as expressly provided herein, all Items of the Schedule 13D remain unchanged.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

Item 6 of the Schedule 13D is hereby amended by adding the following text at the end of the first section:

On December 7, 2021, following the receipt of the FCC Approvals and the satisfaction of certain other customary closing conditions set forth in the Investment Agreement, the Issuer and Searchlight III CVL consummated the Second Closing, pursuant to which (i) Searchlight III CVL invested an additional $75,000,000 into the Company and received, among other things, an additional 15,115,899 shares of Common Stock (the “Second Closing Common Stock”) and (ii) the Note was issued to Searchlight III CVL out of escrow. In addition, effective as of December 7, 2021, Searchlight III CVL exercised its option to convert the Note into Series A Preferred Stock. Searchlight III CVL now holds approximately 35 percent of the outstanding Common Stock after giving effect to the issuance of the Second Closing Common Stock.

Item 6 of the Schedule 13D is also hereby amended by adding the following text at the end of the section entitled “Certificate of Designations for Series A Preferred Stock”:

Effective as of December 7, 2021, Searchlight III CVL exercised its option to convert the Note into Series A Preferred Stock. The foregoing description of the Certificate of Designations is not complete and is qualified in their entirety by reference to the full text of the Certificate of Designations, which is attached to this report as Exhibit 8 and is incorporated herein by reference.

A&R Escrow Agreement

In connection with the Second Closing, the Issuer, Searchlight III CVL and JPMorgan Chase Bank, N.A. (the “Escrow Agent”) entered into an Amended and Restated Escrow Agreement, dated as of December 7, 2021 (the “A&R Escrow Agreement”) pursuant to which, at Searchlight III CVL’s direction, the Issuer deposited with the Escrow Agent a certificate executed by the Company for 50,000 shares of Series A Preferred Stock (the “Escrowed Preferred Shares”).

Searchlight III CVL may not deliver a release instruction to the Escrow Agent with respect to the Escrowed Preferred Shares until the earliest of February 11, 2022 and the occurrence of certain events relating to Federal Communications Commission (“FCC”) regulatory approvals (or Searchlight III CVL’s determination that such FCC approvals are no longer required).

The Escrow Agreement provides that if any cash dividends are payable with respect to the Escrowed Preferred Shares during the period that such shares are held by the Escrow Agent, the Issuer shall retain such dividends in trust for the Investor, and pay such dividends over to Searchlight III CVL upon release of the Escrowed Preferred Shares.

Letter Agreement

In connection with the Second Closing, the Issuer and Searchlight III CVL entered into letter agreement, dated as of December 7, 2021 (the “Letter Agreement”) pursuant to which, among other things, the parties agreed that (i) under certain circumstances associated with the failure to receive certain FCC approvals, the Issuer is required to deliver a notice of redemption in accordance with the Certificate of Designations of a number of the Escrowed Preferred Shares that is sufficient to cause the Investor to hold less than 50% of the total equity of the Issuer as determined under applicable FCC rules and policies, and (ii) during the period commencing on the date of the Side Letter and

ending on the earlier of (x) February 11, 2022 and (y) the release of the Escrowed Preferred Shares in accordance with the terms of the A&R Escrow Agreement, Searchlight III CVL will not vote any of its shares of Common Stock at any meeting of stockholders of the Issuer, subject to certain exceptions. If the Issuer takes certain actions to render such FCC approvals no longer required, the Issuer would not be obligated to redeem such Preferred Shares.

The foregoing description of the Letter Agreement is not complete and is qualified in its entirety by reference to the full text of the Side Letter, which is attached to this report as Exhibit 9 and is incorporated herein by reference.

Item 7. Material to Be Filed as Exhibits.

The following are filed herewith as Exhibits to this Schedule 13D:

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: December 8, 2021