Clearwire plans to raise as much as £221 million ($345 million) in stock transactions to help fund its LTE (Long Term Evolution) network deployment and other activities.
The US WiMax carrier told the Securities and Exchange Commission on Monday that it will offer £192 million ($300 million) of its Class A common stock and also grant the underwriters of the offering an option to buy as much as £29 million ($45 million) of Class A shares. It plans to use the proceeds to deploy its planned LTE network alongside its existing WiMax infrastructure, and for network maintenance and operation and other purposes.
Clearwire also stands to bring in additional funds from Sprint Nextel, its majority owner and main wholesale partner. Sprint has agreed to exercise its rights with respect to the offering, which will allow it to purchase Class B shares in Clearwire and a wholly owned subsidiary, Clearwire Communications, in a separate private transaction.
Formed as a joint venture in 2008, Clearwire built the first national 4G network in the US but now faces better-funded rivals in Verizon Wireless and AT&T, which are deploying LTE networks. LTE has replaced WiMax as the primary choice for 4G around the world, which should inspire vendors to build more devices for the newer system. Clearwire has said it would need to raise about £384 million ($600 million) to build an LTE network.
The offering was announced at a relatively bright moment for Clearwire. Last Thursday, Sprint and Clearwire announced a series of deals worth as much as £1 billion ($1.6 billion), including payments by Sprint for use of Clearwire's WiMax and LTE networks and a possible Sprint equity investment in Clearwire. The companies said that if Clearwire could raise new equity of between £256 million ($400 million) and £448 million ($700 million), Sprint would participate in the funding by investing as much as £222 million ($347 million).