Clearwire holders to get US1.62B in Sprint venture - Mobile World Live

Clearwire holders to get US1.62B in Sprint venture

02 NOV 2009

US WiMAX operator Clearwire is to issue its shareholders about US$1.62 billion worth of shares in its joint-venture with Sprint Nextel in exchange for their existing Clearwire shares, reports Reuters. In a prospectus filed with the US Securities and Exchange Commission (SEC) last Friday, Clearwire’s board, which recommended shareholders vote for the deal, also said it agreed to pay Sprint a termination fee of US$60 million if the deal falls through. Five partners have already announced plans to invest a combined US$3.2 billion in the WiMAX venture, including Comcast, Time Warner Cable, Intel, Google and Bright House. Clearwire expects to close the deal in the fourth-quarter, despite opposition from mobile operator AT&T. The ‘new Clearwire’ venture aims to launch its first mobile WiMAX network in Portland, Oregon, by the end of 2008.

Meanwhile, Unstrung reports that, if the venture goes ahead as planned, Clearwire will have “adequate liquidity for at least the next 12 months.” Unstrung notes that Clearwire has already said it will require an additional US$2 billion to US$2.3 billion to deploy a nationwide mobile WiMAX network. Clearwire’s SEC filing also notes that it expects “to require substantial additional capital in the long-term to fund our business, including further operating losses, network expansion plans and spectrum acquisitions.”

 

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