This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Crest Proposes Debt Financing To Clearwire As Alternative To Sprint Financing

Stocks in this article: CLWR

HOUSTON, April 3, 2013 /PRNewswire/ -- Crest Financial Limited, the largest minority shareholder of Clearwire Corporation (NASDAQ: CLWR), today proposed to provide Clearwire $240 million in financing through a convertible debt facility. The arrangement, described in a letter to Clearwire's board, is superior to the financing provided by Sprint Nextel Corporation and designed to free Clearwire to explore alternatives to Sprint's inadequate merger offer, Crest said. The Crest proposal is similarly structured as the Sprint financing with Clearwire but is more favorable to Clearwire and its minority shareholders.

According to Clearwire's public disclosures, the proposed $240 million of financing would provide Clearwire with enough capital to build-out 2,000 LTE sites as planned and to pay its interest expenses in 2013.  In addition with the $160 million that Clearwire has already received under the Sprint financing and cash on hand, Clearwire would have sufficient funds to build at least 2,133 sites above its 2,000 LTE site build-out plan.  The proposed Crest financing would also provide Clearwire's board with more time to consider alternatives to the proposed merger with Sprint.  Among other alternatives, the Crest financing would allow Clearwire to continue as an independent company and execute its multi-customer business plan that the Clearwire board's own financial advisors, Evercore Group and Centerview Partners, concluded is the most profitable business strategy Clearwire could pursue.  In addition, it would give the Clearwire board the opportunity to pursue sales of excess spectrum, such as to DISH Network Corporation, to provide more liquidity to Clearwire.  Crest believes that DISH made a real and actionable proposal to purchase a portion of Clearwire's excess spectrum some time ago but, for reasons known only to Clearwire, Clearwire has failed to complete such sale.

Under Crest's proposal, Crest would provide $240 million of debt financing to Clearwire through a note purchase agreement. The Crest notes would be issued at 1% interest rate per annum (the same as the Sprint Notes) and with the same maturity date as the Sprint notes. The Crest notes would be exchangeable at $2.00 per share, a significant premium of 33.3% above the $1.50 per share Sprint notes' exchange price. Crest's proposal is not contingent on financing; Crest and its affiliates have sufficient funds available to fund the $240 million in full.

In addition to the higher exchange price of $2.00 a share, the Crest notes have several advantages to the Sprint notes.  First, the Crest notes remain available even if Clearwire's stockholders reject the - merger with Sprint.  Second, if Clearwire were to draw on the Crest notes after the stockholders reject the merger with Sprint, the Crest notes would not become exchangeable until the maturity date in June 2018; by contrast, the Sprint notes are likely to become exchangeable in October 2013 (or sooner).  Consequently, the Crest financing offers greater value to Clearwire stockholders by providing Clearwire with very inexpensive debt for a longer term and possibly avoiding substantial near-term dilution.

In a statement, David Schumacher, the General Counsel of Crest Financial Limited, said:  " Today, Crest has proposed to the Clearwire's board an alternative: the liquidity it needs to continue the build-out of its TDD-LTE wireless network, to explore sales of excess spectrum to DISH or others to provide Clearwire with more liquidity, and to pursue a multi-customer strategy that ensures the highest value for its assets while at the same time avoiding additional draws on the coercive Sprint financing.   To Crest, the benefits of our proposal to Clearwire and its stockholders are clear.  The Sprint notes are intended to leave Clearwire's minority stockholders with the unfair choice of acquiescing to Sprint's inadequate merger offer or suffering significant dilution at the hands of Sprint. Our proposal is aimed at breathing new life into Clearwire by providing the liquidity and time that Clearwire needs to pursue the profitable multi-customer plan that will bring significantly more value to Clearwire's stockholders than the Sprint offer."

Crest's proposed debt financing to Clearwire's board can be found at http://www.bancroftpllc.com/crest/.

About Crest Financial Limited Crest Financial Limited is a limited partnership under the laws of the State of Texas.  Its principal business is investing in securities.

Important Legal Information CREST FINANCIAL LIMITED AND OTHER PERSONS MAY BE DEEMED TO BE PARTICIPANTS (THE " PARTICIPANTS") IN A SOLICITATION OF PROXIES IN RESPECT OF THE PROPOSED MERGER OF CLEARWIRE WITH SPRINT NEXTEL CORPORATION.  THE PARTICIPANTS INTEND TO FILE A PROXY STATEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION.   ALL INVESTORS AND SECURITYHOLDERS OF CLEARWIRE ARE URGED TO READ THE PROXY STATEMENT AND ALL OTHER PROXY MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.  INFORMATION REGARDING THE PARTICIPANTS AND A DESCRIPTION OF THEIR DIRECT AND INDIRECT INTERESTS, BY SECURITY HOLDINGS OR OTHERWISE, WILL BE CONTAINED IN SUCH PROXY STATEMENT AND OTHER PROXY MATERIALS.  UPON REQUEST, THE PARTICIPANTS WILL PROVIDE COPIES OF THE PROXY STATEMENT AT NO CHARGE WHEN IT BECOMES AVAILABLE.  THE PROXY STATEMENT AND ALL OTHER PROXY MATERIALS WILL ALSO BE AVAILABLE AT NO CHARGE ON THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV.

Forward-looking Statements Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predications of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Forward-looking statements are not guarantees of future activities and are subject to many risks and uncertainties. Due to such risks and uncertainties, actual events may differ materially from those reflected or contemplated in such forward-looking statements. Forward-looking statements can be identified by the use of the future tense or other forward-looking words such as "believe," "expect," "anticipate," "intend," "plan," "should," "may," "will," believes," "continue," "strategy," "position" or the negative of those terms or other variations of them or by comparable terminology.

SOURCE Crest Financial Limited

Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,191.37 -195.84 -1.13%
S&P 500 2,002.16 -27.39 -1.35%
NASDAQ 4,637.9940 -43.5030 -0.93%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs