Clearwire reveals $1.1b debt plan
Embattled Wimax operator Clearwire’s stock price fell after it announced plans to raise $1.1 billion (€832 million) through a debt sale.
The firm’s Nasdaq stock fell 13.49% on the announcement, with analysts saying the sum to be raised is not enough to cover a shortfall in funding rollout of Clearwire’s national Wimax network.
“It's only $1 billion, and in view of the other options this is likely one of the higher-cost of capital options,” Mizuho Securities analyst Michael Nelson told Reuters.
The US telco last month said it would cut 15% of its 4,200 staff, admitting it did not have enough funds to complete its network rollout.
It said at the time that it would consider asset sales, partnerships or fresh debt or equity issues from investors – which include Sprint, Google, Intel Capital, Comcast and Time Warner Cable – to boost the coffers.
But the news that it was not taking on more equity sparked a 6% rise in Sprint Nextel, which owns 54% of the company.
Clearwire, which has embarked on the world’s largest mobile Wimax rollout, posted a $139 million loss in the third quarter, on revenue of $147 million.