SAN DIEGO, United States-U.S. operator Leap Wireless International has retained UBS Warburg to help the carrier explore new sources of financing and restructuring for its debt and said it will begin discussions with creditor groups in the near future to address the financial challenges facing the company. Leap said it believes it should be able to continue to operate through the process.
“In light of the company’s high level of debt and the restricted availability of the capital markets, we believe that hiring UBS Warburg and pursuing the alternatives available to us are in the best interest of the company and all of its stakeholders,” said Harvey White, chairman and chief executive officer (CEO) of Leap.
Further stressing its financial position, Leap also announced it intends to issue approximately 21 million shares to MCG PCS as part of an arbitrator’s settlement agreement concerning Leap’s purchase of spectrum licenses in Buffalo and Syracuse, New York. Leap said the issuance of shares to MCG will probably cause it to fail to comply with, and to require waivers of or amendments to, its vendor credit agreements in the near term.
In addition, Leap said it would likely issue the shares to MCG without first obtaining shareholder consent due to time constraints, which may force the Nasdaq National Market System to delist the company’s stock.
Leap’s stock was trading down more than 40 percent in early Thursday trading at an all-time low of 39 U.S. cents per share, which is well below its 52-week high of US$23.10 per share and its all-time high of more than US$110 per share set in early 2000.
