Clearwire Has Cash for 'at Least' 12 Months
Clearwire LLC (Nasdaq: CLWR) says it will have "adequate liquidity for at least the next 12 months," assuming that the deal with Sprint Corp. (NYSE: S) and the associated $3.2 billion financing closes as expected in the fourth quarter.
That's from Clearwire's latest filing with the Securities and Exchange Commission (SEC) , where the operator lays out a little more detail about its future financing wants and needs.
The Kirkland, Wash.-based operator believes it will have enough cash to endure 12 months of "operating losses, capital expenditures, working capital and current spectrum acquisition commitments," according to the filing.
Clearwire has already said it will require an additional $2 billion to $2.3 billion to roll out a nationwide mobile WiMax network through 2010 and beyond, although some analysts have questioned that total. (See Can Clearwire Do It? and CLWR: Where It's at With WiMax.)
Clearwire's SEC filing notes that it expects "to require substantial additional capital in the long-term to fund our business, including further operating losses, network expansion plans and spectrum acquisitions."
Of course, there's the question of how the company will raise that extra money in trying economic times.
"We may not be able to secure adequate additional financing when needed on acceptable terms or at all," the operator writes. Clearwire is considering the possibility of additional public or private offerings and "will likely seek significant additional debt financing, in the short-term and the long-term." The company already has $1.25 billion under a senior term loan facility in 2007.
Additionally, the operator says in the SEC papers that it will issue its shareholders about $1.62 billion worth of shares in its wireless joint venture with Sprint, based on the closing price last Wednesday. Sprint's share price has dropped significantly since it inked the deal to become "new Clearwire." (See Clearwire Keeps Falling.) Nonetheless, everything still hinges on whether Clearwire and friends can close the deal in the fourth quarter, as the operator expects, despite complaints about spectrum from AT&T Inc. (NYSE: T). (See Clearwire: We're Still on Track.) The new Clearwire is expecting to go commercial with its first mobile WiMax network in Portland, Ore., by the end of 2008. (See The WiMax State of Play in the USA.) — Dan Jones, Site Editor, Unstrung