UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 11, 2015
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NII HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
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Delaware (State or other jurisdiction of incorporation) | 000-32421 (Commission File Number) | 91-1671412 (IRS Employer Identification No.) |
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1875 Explorer Street, Suite 800 Reston, Virginia (Address of principal executive offices) |
20190 (Zip Code) |
Registrant's telephone number, including area code: (703) 390-5100
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Definitive Material Agreement.
On September 11, 2015, NII Mercosur Telecom, S.L.U. and NII Mercosur Móviles, S.L.U., sociedades limitadas unipersonales organized under the laws of Spain (together, the “Sellers”), indirect subsidiaries of NII Holdings, Inc. (the “Company”), entered into a Binding Offer (the “Binding Offer”) with Grupo Clarín S.A., a sociedad anónima organized under the laws of Argentina (the “Purchaser”), to sell all of the outstanding equity interests (participaciones sociales) of Nextel Communications Argentina S.R.L., a sociedad de responsibilidad limitada organized under the laws of Argentina, a subsidiary of the Sellers and an indirect subsidiary of the Company, that operates wireless networks in major business centers in Argentina, including Buenos Aires, Cordoba, Rosario and Mendoza, along related transportation corridors and in a number of smaller markets (“Nextel Argentina”).
The Binding Offer provides for aggregate cash consideration of approximately $178 million, which is subject to adjustment, of which $159 million was paid in connection with the transfer of 49% of the equity interests in Nextel Argentina and the grant of a call option that allows the Purchaser or any of its affiliates to acquire the remaining 51% of the equity interests (the “Call Option”) upon receipt of required approvals from the regulatory authorities in Argentina. The remaining consideration is due within 30 days.
Pending receipt of the regulatory approvals, the Sellers issued a promissory note in the amount of $85 million (the “Promissory Note”) and pledged the remaining 51% of the equity interests in Nextel Argentina. The Promissory Note has been pledged by the Purchaser to the Sellers pursuant to a note pledge agreement, does not require the payment of periodic interest and will be assigned to the Sellers upon delivery of the remaining 51% of the equity interests in Nextel Argentina. The Promissory Note only provides for payment to the Purchaser if Nextel Argentina makes unauthorized distributions, if the required approvals from the regulatory authorities in Argentina are received and the Sellers fail to deliver the remaining 51% of the equity interests, or if such regulatory approvals are not received within three years (four years if the Purchaser exercises an extension) and the Sellers fail to liquidate their assets in Argentina upon the Purchaser’s request in accordance with the Call Option. The Company guarantees the obligations of the Sellers under the Promissory Note, the Binding Offer and the Call Option in accordance with their respective terms.
Pending consummation of the transfer of the remaining 51% of the equity interests, the Sellers have agreed to cause Nextel Argentina to (i) conduct its business in the ordinary course, and (ii) maintain and preserve certain business relationships. The Binding Offer provides that $6 million of the purchase price will be held in escrow for one year to fund any indemnification obligations of the Sellers relating to the representations, warranties and covenants of the Sellers in the Binding Offer.
The foregoing description of the sale does not purport to be complete and is qualified in its entirety by reference to the full text of the operative documents, which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2015.
Item 7.01. Regulation FD Disclosure.
On September 14, 2015, the Company issued a press release announcing the execution of the Binding Offer. A copy of the press release is attached as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Press Release issued by NII Holdings, Inc. dated September 14, 2015
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| NII HOLDINGS, INC. |
| (Registrant) |
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Dated: September 16, 2015 | By: /s/ SHANA C. SMITH |
| Shana C. Smith |
| Vice President and Secretary |
EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release issued by NII Holdings, Inc. dated September 14, 2015
Exhibit 99.1
NII ANNOUNCES STRATEGIC ALLIANCE WITH GRUPO CLARIN IN ARGENTINA
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• | Grupo Clarin purchases a 49% equity interest in Nextel Argentina and an option to acquire the remaining 51% pending regulatory approvals |
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• | Total consideration for the transaction is $178 million |
RESTON, Va., September 14, 2015 - NII Holdings, Inc. [NASDAQ: NIHD] today announced a strategic alliance with Grupo Clarin in Argentina. In connection with the transaction, Grupo Clarin acquired a 49% equity interest in Nextel Argentina and an option to acquire the remaining 51% equity interest in Nextel Argentina upon receipt of approvals from the regulatory authorities in Argentina for total consideration of $178 million, of which $159 million was paid up front, with the remaining amount due within 30 days. The net proceeds received from the transaction will be used to provide additional liquidity to support NII’s operations in Brazil.
“The transaction with Grupo Clarin creates a promising path for the future of Nextel Argentina and its employees to compete effectively in the mobile market in Argentina,” said Steve Shindler, NII’s chief executive officer. “At the same time, it is consistent with our strategy to concentrate our resources on our operations in Brazil and provides incremental capital to improve our liquidity to support our business there.”
Nextel Argentina will continue to be controlled and operated by NII pending the receipt of the necessary regulatory approvals.
NII Holdings was advised by Jones Day as legal advisor.
About NII Holdings, Inc.
NII Holdings, Inc., a publicly held company based in Reston, VA, offers differentiated mobile communications service including fully integrated wireless voice and data services under the Nextel brand in Brazil and Argentina. Visit NII's website at www.nii.com.
Nextel, the Nextel logo and Nextel Direct Connect are trademarks and/or service marks of Nextel Communications, Inc.
Visit NII's news room for news and to access our markets' news centers: nii.com/newsroom.
About Grupo Clarin
Grupo Clarín is the largest media company in Argentina and a leading company in the cable television and Internet access, printing and publishing, and broadcasting and programming markets. Its cable television network is one of the largest in Latin America in terms of subscribers, and is a leading broadband provider in Argentina. Its newspaper -Diario Clarín- is one of the highest circulation newspapers in Latin America. Grupo Clarín is the largest producer of media content in Argentina, including news, sports and entertainment and reaches substantially all segments of the Argentine population in terms of wealth, geography and age.
Safe Harbor Statement
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. This news release includes “forward-looking statements” within the meaning of the securities laws. The statements in this news release regarding the business and economic outlook, future performance and forward-looking guidance, as well as other statements that are not historical facts, are forward-looking statements. Forward-looking statements are estimates and projections reflecting management's judgment based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. With respect to these forward-looking statements, management has made assumptions regarding, among other things, NII’s ability to complete the sale of Nextel Argentina, including receiving the required regulatory approval for the sale, NII’s ability to meet its business plans, customer growth and retention, pricing, network usage, operating costs, the timing of various events, the economic and regulatory environment and the foreign currency exchange rates that will prevail during 2015. Future performance cannot be assured and actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include the risks and uncertainties relating to: the completion of the sale of Nextel Argentina, the impact of liquidity constraints, the impact of more intense competitive conditions and changes in economic conditions in Argentina and Brazil, the performance of the NII’s networks, NII’s ability to provide services that customers want or need, the ability of NII to continue as a going concern, NII’s ability to execute its business plan, and the additional risks and uncertainties that are described in NII’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2015, as well as in other reports filed from time to time by NII with the Securities and Exchange Commission. This press release speaks only as of its date, and NII disclaims any duty to update the information herein.
Media Contacts:
NII Holdings, Inc.
1875 Explorer Street, Suite 800
Reston, VA. 20190
(703) 390-5100
www.nii.com
Investor and Media Relations:
Tahmin Clarke
(703) 390-7174
tahmin.clarke@nii.com
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