Clearwire draws down another $80 million from Sprint, hammering another nail in Dish Network's coffin

Clearwire draws down another $80 million from Sprint, hammering another nail in Dish Network's coffin
Network operator Clearwire has drawn down a second $80 million in financing from Sprint. As part of Sprint's deal to buy out the remaining shares of Clearwire that it doesn't own, the carrier has offered $800 million to Clearwire to be drawn down over 10 months. The plan makes it harder for a third party like Dish Network to scuttle the deal and buy Clearwire itself. Dish, looking to become a wireless carrier, lobbed in a higher bid to buy Clearwire, but with Sprint already owning half the company, the odds were against Dish Network to begin with.

During January and February, Clearwire refrained from drawing down any of the money available to it under the terms of its deal with Sprint because it was still considering the deal from Dish Network. But earlier this month, Clearwire took its first $80 million installment and has now announced that it will take another $80 million in April.

Dish has threatened to walk if Clearwire continues drawing down the financing from Sprint. The reason is because every time that Sprint lends $80 million to Clearwire, it is in the form of a convertible note that can be converted to Clearwire shares at $1.50 a share. Considering that the stock is currently trading near $3.25, Sprint can convert the debt, increase its majority position in the stock and dilute the holdings of other Clearwire investors. Based on the current price of Clearwire's stock, some investors must believe that Dish Network does have a shot of at least getting Sprint to raise its $2.97 a share bid. Dish is offering $3.30 a share, a lot closer to the current price of the stock than Sprint's offer.

source: WSJ

FEATURED VIDEO

6 Comments

1. Sdubb3

Posts: 19; Member since: Jan 22, 2012

So ummm.....can we have a faster LTE rollout? IJS.

5. SprintGuy26

Posts: 229; Member since: Mar 21, 2011

yea really....sprint needs to speed up the whole LTE roll out!

2. axllebeer

Posts: 271; Member since: Apr 05, 2011

Is LTE even related to Clear Wire? I honestly can't remember.

3. imkyle

Posts: 1114; Member since: Nov 18, 2010

LTE is mentioned on their page, but no site of a release date.

4. 305Bucko

Posts: 506; Member since: Aug 07, 2011

It IS undr the "Network Vision" plans to alternate LTE between the 800, 1900, and 2500 bands... So yes. But i belive what he meant was: can we finish this deal already and move on to whats important in the company.

6. lsutigers

Posts: 832; Member since: Mar 08, 2009

No kidding. Sprint doesn't really need Clearwire, their Network Vision upgrades / LTE deployments are plenty fast. They just recognize that Clear is a bargain and they have already invested enough money into them. As 305Bucko mentioned, Clear is part of the Network Vision plan but not a requirement for Sprint. The main reason they wanted Clear is because they have successfully tested and achieved 100mbps+ TD-LTE in high frequency spectrum which is great for metro areas and is faster than anyone else. Also, Qualcomm announced they got TD / FD LTE to work together along with a ton of different frequencies on a single chip so it's a win win. Not to mention they'll be able to offer true worldwide LTE service as TD-LTE is being used in Asia and Europe which is something the other carriers can't offer.

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.