Clearwire’s future continued on its un-clear path as the wireless broadband company announced plans to dip into an $80 million “draw” provided by Sprint Nextel as part of its ongoing attempt to acquire Clearwire, though Clearwire’s management reiterated that it has still not decided to move forward with that deal.
The draw, which was originally as much as $800 million, was offered as part of Sprint Nextel’s accepted $2.2 billion acquisition attempt of Clearwire late last year. The offer is in the form of exchangeable notes for Clearwire common stock at $1.50 per share and is set to be drawn on March 1. Clearwire did not draw on offers that were presented for January and February.
Clearwire’s stock (CLWR) was trading down 1.5% early Wednesday at $3.15 per share.
Clearwire also noted that it has reached an agreement with Sprint Nextel to amend the financing agreement to remove conditions on draws scheduled for later this year that would have tripped requirements for Clearwire to accelerate the build out of its LTE-based wireless broadband network. Clearwire added that it does not expect to enter into that accelerated agreement at this time.
Clearwire is currently operating a WiMAX-based network covering approximately 130 million potential customers that is the basis for one of Sprint Nextel’s “4G” offerings. Sprint Nextel is also in the process of rolling out an LTE network of its own that currently covers approximately 50 markets and is the basis for its other “4G” branded service. The carrier is looking to tap into Cleawire’s deep 2.5 GHz spectrum holdings to further expand the capacity of its LTE offering.
Sprint Nextel is also in the process of being acquired by Japan’s Softbank in a $20.1 billion deal that will see Softbank gain control of 70% of Sprint Nextel. Sprint Nextel’s management noted that the funds from that transaction precipitated its attempt to gain remaining control of Clearwire.
Clouding the deal is an ongoing attempt by Dish Networks to strike a deal with Clearwire, which was put on the table earlier this year. Clearwire noted that an independent board was still going over details and through negotiations with both companies in order to strike the best deal for shareholders. Dish had noted in its offer that it would withdraw the proposal should Clearwire draw on the financing offered by Sprint Nextel.
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