Clearwire Says Needs $1.7 Billion Funds to Keep Operating

Clearwire Corp. (CLWR), the money-losing wireless-service provider, said it needs at least $1.7 billion to cover a cash shortage and continue operating.

The company, based in Bellevue, Washington, needs the funds through 2014 to make up for the shortfall, it said in a filing yesterday. The shortfall reflects “less certain revenues and high fixed costs,” it said.

Clearwire, which is majority owned by Sprint Nextel Corp. (S), said last month it will draw $80 million in financing from Sprint for a third straight month, leaning on the wireless carrier for funding as it awaits a shareholder vote on a proposal by Sprint to buy the rest of the company.

Rival suitor Dish Network Corp. (DISH), seeking to gain control of valuable airwaves, has offered $25 billion for control of Sprint and $3.30 a share for Clearwire stock, more than Sprint’s $2.97- a-share offer.

In the filing yesterday, Clearwire said Sprint’s offer “provides a compelling value to Clearwire minority shareholders.” As part of the evaluation of the Sprint offer, Clearwire provided two business scenarios in which it requires $2 billion to $4 billion in additional funding through 2017.

Under its current structure, the “prospects of securing funding are highly uncertain,” it said in the filing.

Verizon Communications Inc. (VZ), the second-largest U.S. phone company, offered Clearwire $1 billion to $1.5 billion for airwaves in major cities, the New York-based company said last month. Clearwire reiterated in yesterday’s filing that a special committee would review the proposal.

Clearwire shareholders are scheduled to vote on Sprint’s offer on May 21.

The company’s stock fell 1.5 percent to $3.31 at the close in New York yesterday. Sprint rose less than 1 percent to $7.06, while Dish declined less than 1 percent to $39.14.

To contact the reporter on this story: Ben Livesey in London at blivesey@bloomberg.net

To contact the editors responsible for this story: Ben Livesey at blivesey@bloomberg.net; Cecile Daurat at cdaurat@bloomberg.net

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