By Thomas Gryta 
 

Sprint Nextel Corp. (S) is no longer the majority owner of Clearwire Corp. (CLWR) after the latter's latest issuance of stock to raise money.

The move marks the latest chapter in the complex relationship between Overland Park, Kan.-based Sprint and the smaller wireless-network company that has been its partner in developing its 4G network. Sprint remains Clearwire's largest shareholder and their working relationship hasn't changed, according to both companies.

A Sprint spokesman couldn't give an exact estimate of the current stake because the Clearwire equity offering is ongoing.

The Sprint spokesman said the company has a right to buy shares in Clearwire equity offerings but declined to do so in the latest round. Sprint will evaluate future opportunities to buy shares on a case-by-case basis.

A year ago, Sprint reduced its voting stake to distance itself from the financially fragile Clearwire. The move meant that Clearwire couldn't be considered a unit and potentially affect Sprint's debt if there was a default or other major event. Sprint surrendered Class B shares, which aren't publicly traded, cutting its voting interest to 49.9% from 54%.

But now that Clearwire has been selling shares to raise funds, Sprint is no longer the majority holder so it has reclaimed its voting rights in to order to match its economic stake. According to a filing, it paid about $8,000 to reclaim the Class B shares.

Both companies stressed that the shift doesn't alter other components of their relationship.

Despite owning less than 50% of Clearwire, Sprint's equity-ownership agreement is unchanged and it will continue to control seven of the 13 seats on Clearwire's board.

Late last year, Clearwire signed a new network partnership with Sprint to help fund its operations beyond 2012, along with selling additional $300 million in equity. In May, the company said it would raise up to $300 million in another stock sale over the coming months to help fund operations.

Sprint is building the 4G network on a standard known as LTE, which is in use by Verizon Wireless and AT&T Inc. (T), over the next several years. Sprint also uses Clearwire's 4G network that runs on WiMax technology and Clearwire is also building its own LTE network.

Numerous investors have walked away from Clearwire. In March, Google Inc. (GOOG) sold its entire 29.4 million share stake in Clearwire for a $433.5 million loss, ending a nearly four-year $500 million investment. Intel Corp. (INTC) wrote down the entire value of its 7.3% voting stake in Clearwire earlier this year.

--Greg Bensinger and Shara Tibken contributed to this article.

Write to Thomas Gryta at thomas.gryta@dowjones.com

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