Sprint, others give Clearwire $1.5B in financing

AP News
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Posted: Nov 10, 2009 12:16 PM

Investors in Clearwire Corp., including Sprint Nextel Corp. and major cable companies, Tuesday said they are pumping an additional $1.5 billion into the company so it can keep building out its nationwide wireless data network.

Sprint, which owns 51 percent of Clearwire, is putting up $1.176 billion. Comcast Corp., the country's largest cable company, is investing $196 million, and Time Warner Cable Inc. and Bright House Networks are adding $103 million and $19 million, respectively.

Sprint resells Clearwire's service, based on WiMax technology, in the few markets where it's already available. Comcast does the same, giving it an opportunity to compete with the wireless data offerings of AT&T Inc. and Verizon Communications Inc.

Intel Corp., which created WiMax and remains a major backer of the technology, invested $50 million.

Eagle River Holdings, the investment company of Clearwire founder Craig McCaw, added $20 million.

Sprint merged its own fledgling WiMax division into Clearwire last year, while the other investors kicked in $3.2 billion.

Shares of Kirkland, Wash.-based Clearwire rose 19 cents, or 2.8 percent, to $6.99 in midday trading. The shares rose 4.6 percent Monday after The Wall Street Journal carried an unconfirmed report about the investment.

Clearwire also said it would offer senior notes worth at least $1.45 billion to pay off its credit facility.

Analyst Christopher King at Stifel Nicolaus said the deals will give Clearwire $1.8 billion in cash and reduce the "funding gap" for its buildout to $3 billion. It won't need to raise more money until late in 2011 or early 2012, he wrote in a research report.

Clearwire company is set to release third-quarter financial results after the market close on Tuesday.

Sprint shares fell 11 cents, or 3.2 percent, to $3.32.