Clearwire Says Needs $1.7 Billion Funds to Keep OperatingBen Livesey
Clearwire Corp., 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., 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., 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., 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.