AAA Clearwire searches for next year’s funding

Clearwire searches for next year’s funding

Clearwire, a Nasdaq-listed wireless communications company backed by Intel Capital, the corporate venturing unit of semiconductor company Intel, has said its near-$1.4bn in cash and available assets was unlikely to be enough to cover its spending over the next 12 months.

In a regulatory filing, Clearwire said: "As of September 30, we had available cash and short-term investments of approximately $1.38bn. Based on our current projections, we do not expect our available cash and short-term investments as of September 30, to be sufficient to cover our estimated liquidity needs for the next 12 months.

"We also do not expect our operations to generate positive cash flows during the next 12 months. Thus, we will be required to raise additional capital during the next 12 months in order to continue operations. Further, we also need to raise substantial additional capital over the long term to fully implement our business plans…

"We are in discussions with a number of our major shareholders and other third parties about a number of options, including potential strategic transactions, additional debt or equity financings and/or asset sales. A special committee of our board of directors has been formed to explore strategic alternatives, including transactions that may involve a sale or other realignment of the ownership and governance of our company."

The company also said it might sell part of its spectrum that allows communications to pass without wires.

In November last year, Clearwire raised $4.33bn in debt and equity, including $1.56bn from Sprint Nextel, as its majority owner, Intel, Comcast, Time Warner Cable, Eagle River and Bright House Networks.

Intel Capital invested $600m as part of a $900m round in July 2006, in its largest investment in a portfolio company and in a round joined by Motorola Ventures, the corporate venturing unit of phone maker Motorola. Two years ago, Intel Capital had reportedly invested $1bn in total in Clearwire as part of a much larger total capital raising and as Clearwire formed a partnership with Sprint.

 

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