(FROM THE WALL STREET JOURNAL 2/25/15)
By Sara Randazzo
The proposed sale of Nextel Mexico to AT&T Inc. for nearly
$1.9 billion has cleared a milestone, though competing bidders
still have a month to up the ante on the deal.
Latin America Nextel carrier NII Holdings Inc. won approval Feb.
17 from Judge Shelley Chapman in U.S. Bankruptcy Court in Manhattan
to proceed with a sale process that aims to complete a deal by late
next month.
Competitors have until March 17 to submit a rival bid, which
would be tested at a March 20 auction in New York. NII plans to go
back before Judge Chapman March 23 to win final clearance of a
sale. Outside of bankruptcy court, the sale also needs the approval
of Mexican regulators.
The acquisition, if approved, would give AT&T a network that
covers about 76 million people in the Mexican wireless market. The
company plans to integrate Nextel Mexico with Iusacell, which
AT&T agreed to buy late last year in a deal valued at $2.5
billion at the time.
The deal also includes all of NII's wireless properties in
Mexico, including network assets, retail stores, three million
subscribers and spectrum licenses. The proposed $1.875 billion
purchase price excludes an unspecified amount of outstanding
debt.
Anyone wishing to challenge AT&T's offer must put down a
good-faith deposit of $32 million, which would go to AT&T if
the telecommunications giant is trumped at an auction. AT&T
would also be in line to have as much as $10 million in
deal-related expenses reimbursed.
NII Holdings and several affiliates filed for chapter 11
protection in New York last fall after skipping a $118.8 million
interest payment. Its operating companies in its key Brazil and
Mexico markets weren't included in the bankruptcy.
The Nextel carrier has until April 13 to file a reorganization
plan without the threat of rival proposals. In November, NII
announced a restructuring deal that would put the company in the
hands of its bondholders. Unsecured notes totaling $4.35 billion
would be converted into equity in a reorganized NII, with key
creditors Aurelius Capital Management and Capital Research and
Management Co. agreeing to backstop a $500 million rights offering.
The deal, which also includes $250 million in new debt, has broad
support among creditors. Reston, Va.-based NII provides mobile
communications services in Latin America, operating under the
Nextel brand in Brazil, Mexico, Argentina and Chile.
---
Michael Calia and Joseph Checkler contributed to this
article.
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