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.
- see this Reuters article
Clearwire to raise $595M via stock offerings
Sprint, Clearwire ink agreements on $1.6B in funding, LTE
Clearwire may miss Dec. 1 debt payment, raising fears of a default
Sprint raises $4B in debt offering, hints at Clearwire funding
Clearwire CEO: 'There remains a gap' between Clearwire and Sprint
Clearwire ditches postpaid service, offers prepaid unlimited at $50
Clearwire to deploy LTE - if it can get additional funding