MCLEAN, Va.-The McCaw family announced Monday an early commitment to exercise its option to acquire $232.5 million in Nextel common stock.
The family also has agreed to provide Nextel with $50 million in senior secured financing so Nextel can meet commitments with its equipment vendor, Motorola Inc.
In addition, Nextel released first-quarter results that indicate the company added 122,600 digital subscribers between Jan. 1 and March 31.
The McCaw family intends to exercise its option to acquire 15 million shares of Nextel common stock on July 28, at an exercise price of $15.50 per share. The McCaw family also purchased, for $25 million, options to acquire up to 25 million shares expiring in July 1998 for a total exercise price of $420 million in new equity.
With the new announcements, the potential investment by the McCaw family in Nextel stands at about $1.6 billion.
McLean, Va.-based Nextel said it now has 422,900 digital units in service across the country. The increase, Nextel said, is a “70 percent jump over last year’s fourth quarter results when 72,300 subscribers were added.”
The company said the average monthly revenue per digital unit was $59 in the first quarter ended March 31, compared with $56 in fourth quarter 1996.
Strong subscriber growth combined with the early option exercise and enhanced financing from the McCaw family are significant votes of confidence that Nextel is on track with its business plan, said Dan Akerson, Nextel chairman and chief executive officer.
