Clearwire (NASDAQ:CLWR) announced it has priced its new debt offering at $1.33 billion and said it is still considering the sale of some of its vast holdings of spectrum and new equity financing as it needs additional financing to keep up an aggressive rollout schedule, said the company's CFO Erik Prusch.
Prusch, speaking at the JPMorgan SMid Cap Conference, said the company hopes to have one or both of its funding issues resolved by the end of this year's fourth quarter, or in the first quarter of 2011. Prusch said Clearwire had hoped to complete debt financing at the same time as a spectrum sale and new equity financing. However, he said the debt market was "hot" and that the company had to act on its recently announced debt offering. Clearwire could raise another $760 million if Sprint Nextel (NYSE:S), which holds a 54 percent stake in Clearwire, decides to buy convertible bonds, but it has not committed to doing that.
"This definitely relieves one of the pressure points, which is the liquidity in the near term," Prusch said of the debt offering.
Prusch said Clearwire has 150 megahertz to 160 megahertz of spectrum in its top 100 markets and said the company could sell off spectrum in regional or market-by-market pieces. However, Prusch said it's too early to tell how the spectrum auction process might turn out.
"We have seen good interest in our spectrum portfolio," Prusch added. "And I can say we've been working very hard on equity for a while." He declined to talk about new equity partners, and cautioned there is no guarantee that Clearwire will complete a spectrum sale or attract a new equity partner.
Sprint supports a wholesale agreement between Clearwire and T-Mobile USA, according to a Goldman Sachs analyst who recently met with Sprint executives. Clearwire has previously held talks with T-Mobile but details have never been revealed. Recently, Clearwire cut back on new market rollouts, cut contract positions and suspended direct marketing efforts in new markets to deal with its funding crisis.
For more:
- take a look at this AP article
- see this Dow Jones article
- read this Reuters article
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