Clearwire (NASDAQ:CLWR) is likely to reach a funding agreement with its majority owner Sprint Nextel (NYSE:S) by the end of the year and possibly before Clearwire is in default on a loan, according to a Reuters report.
Citing a source familiar with the situation, Reuters reported that Clearwire is optimistic about reaching a funding deal with Sprint. Clearwire has said it may skip a $237 million debt payment due Dec. 1 in an effort to conserve cash. The company has a 30-day grace period before it is considered in default of the loan.
Clearwire had $698 million in cash and short-term investments on hand Sept. 30 and has enough money to make the debt payment. Skipping the payment has raised concerns about the company's liquidity and whether or not it can stay out of bankruptcy court.
Clearwire, in which Sprint owns a 54 percent stake, wants to build out a TD-LTE network and needs around $150 million to $300 million to maintain its legacy WiMAX network. Earlier this month, Clearwire CEO Erik Prusch said "there remains a gap" between Clearwire and Sprint, but he said he hopes the companies will be able to reach an agreement on possible funding and network roaming.
Sprint recently disclosed a non-binding agreement between Sprint and Clearwire that will cover the design of Clearwire's planned LTE network, but has yet to fork over any money.
For more:
- see this Reuters article
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