Clearwire (NASDAQ:CLWR) was teetering into bankruptcy just a week ago and now it has a $1.6 billion funding deal with partner Sprint Nextel (NYSE:S) and plans to up size its public offering of common stock by $50 million to $350 million.
Clearwire said it would offer 175 million shares at $2 per share. Clearwire also said it expects to grant the offering underwriters a 30-day option to purchase up to an additional $52.5 million of its Class A stock
Separately, Sprint Nextel ,which owns the majority economic interest in Clearwire, will purchase $295 million of Clearwire's Class B Common Stock in a private transaction, Sprint spokesman Scott Sloat confirmed to Bloomberg earlier this week. As part of a wide-ranging series of agreements the two companies announced last week plans to fund Clearwire and collaborate on LTE deployments, Sprint said that if Clearwire raised new equity between $400 and $700 million, it would participate in the offering and contribute up to $347 million.
The new funding comes just days after Sprint and Clearwire announced funding deals worth up to $1.6 billion over four years. Taken together with the stock offerings, the transactions should give Clearwire a significant funding cushion as it moves ahead with plans to deploy a TD-LTE network over at least part of its existing WiMAX network.
Last month Clearwire was considering skipping a $237 million debt payment due Dec. 1. Defaulting on the loan would have sent the company into bankruptcy if Sprint would not have saved the day with the funding deal.
For more:
- see this Reuters article
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