Sprint pulled the plug on its planned $3 billion convertible-preferred stock sale just a day after announcing it. The company said the reason for the change is that the interest it would be paying on the financing wasn't attractive. Sprint decided it didn't need the money enough to follow through with the deal.
Sprint said that proceeds from the convertible stock sale would have been used to accelerate plans to pay down some of its $24.3 billion in debt. Some analysts speculated that the convertible stock sale was a sign that Sprint was planning to sell its iDEN business. Walter Piecyk of Pali Research said that the convert deal would offer added liquidity so Sprint could sell iDEN and prevent debt from being transferred to the acquiring company.
Sprint, however, is looking at other ways to raise money. The company recently announced plans to sell 3,300 of its towers to TowerCo for about $670 million in cash.
- See this WSJ article (sub. req.)