Leap Wireless Struggling to Stay Upright
Updated from 5:22 p.m. EDT
The latest cash crunch may have permanently grounded Leap Wireless (LWIN Quote).
The embattled carrier's stock plunged precipitously today on news that it is likely to violate its debt covenants after an arbitration court ruled against the company. In afternoon trading, shares were tanking 31 cents, or 41.9%, to 43 cents; shares had touched intraday 52-week lows before recovering.
In a prepared statement, Leap said that based on an arbitration court ruling, the company will be paying 21 million shares to MCG PCS, priced at $1.894 a share, amounting to about $41 million. As a result, the company said it "will probably cause the company to fail to comply with, and to require waivers of, or amendments to, its vendor credit agreements in the near term," which could cause creditors to deem loans to be payable immediately. ...
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