Clearwire to make $300 million stock offering to fund its LTE rollout
The move follows on the heels of Sprint’s agreement to supply a guaranteed $1 billion in funding to pay for WiMAX, plus an additional $700 million in additional funds if certain conditions were met. Approximately half of that $700 million was based on Clearwire’s ability to raise additional funding, which presumably is what triggered the stock offering.
Clearwire and Sprint have had a somewhat troubled “on again, off again” relationship, including an attempt by Sprint to negotiate an outright purchase of Clearwire. Clearwire has had to make difficult decisions about what assets to sell, and whether to make debt payments, while trying to roll out their next generation LTE network.
The transition to LTE is seen as necessary to allow Clearwire and Sprint to compete with Verizon’s rapidly expanding LTE network, as well as AT&T’s nascent LTE network. Yet the expense of setting up such networks demands a large cash investment, even as a Clearwire attempts to get back to profitability.
source: Clearwire via electronista