US wireless provider Clearwire, under offer from both Sprint Nextel and Dish, needs to draw on US$240m financing from Sprint and secure up to US$250m in vendor financing this year.
Speaking on a conference call yesterday Clearwire’s CFO Hope Cochran…
US wireless provider Clearwire, under offer from both Sprint Nextel and Dish, needs to draw on US$240m financing from Sprint and secure up to US$250m in vendor financing this year.
Speaking on a conference call yesterday Clearwire’s CFO Hope Cochran said the company needs to utilise vendor financing and the financing pledged by Sprint – in the form of convertible notes – to satisfy its operating, financing and capital spending for 2013.
In a previous SEC filing Clearwire said it would need to draw on US$240m of the total US$800m financing offered by Sprint; part of its US$2.2bn buyout offer for the wireless provider.
Clearwire has had to pass on two months worth of Sprint’s financing, amounting to US$160m, due to Dish’s rival offer which its board is still evaluating.
If Clearwire cannot tap at least three months worth of Sprint financing it said it may not have sufficient funds to meet its operating and capital expenditure needs in the near term.
The total amount Clearwire can now draw is US$640m.
Full availability of the financing is contingent upon Sprint’s merger agreement gaining approval from non-Sprint class A stockholders, and reaching agreement with Sprint on an accelerated LTE build plan. Sprint already controls roughly 63% of Clearwire.
While Clearwire’s special committee reviews Dish’s offer they will continue to evaluate whether to access the financing on a monthly basis.
The wireless wholesaler also said approximately US$200m to US$250m of its LTE equipment spend will be financed under vendor financing vehicles.
Clearwire’s board accepted and recommended a bid from Sprint in December for US$2.97 per share.
On 9 January Dish offered US$3.30 per share, a higher offer but with numerous material uncertainties and conditions attached, some of which would require approval from Sprint.
Dish had asked the FCC to pause its review of Softbank’s deal with Sprint – inextricably linked to Sprint’s Clearwire bid – but the New York post reported last week that the FCC had rejected the request.
Clearwire is advised by Evercore Partners, while Kirkland & Ellis is its counsel.
Clearwire’s special committee is advised by Centerview Partners with Simpson Thacher & Bartlett and Richards, Layton & Finger acting as counsels. Blackstone Advisory Partners advises Clearwire on restructuring matters.
