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Google Inc. (GOOG), an early investor in Clearwire Corp. (CLWR), said it would seek to sell its entire stake in the wholesale mobile broadband provider at a loss of nearly $453 million.
Google is looking to sell its 29.4 million Class A shares for $1.60 each, or $47.1 million, representing a 91% discount from its initial investment in Clearwire in 2008. The Internet search company said in a securities filing on Friday that it would offer its 6.5% stake to other Clearwire investors beginning Monday before offering them to the general public after five days.
"Google periodically rebalances its investments based on its goals and its evaluation of market conditions," the company said in its filing, without providing more details. Representatives from Google and Clearwire declined to comment.
Shares of Bellevue, Wash.-based Clearwire recently dropped 5.1% to $2.15 .
Clearwire last week cautioned it may need to raise more capital to fund its operations beyond year end and said it could no longer offer debt secured by its valuable network assets. It plans to spend $600 million towards building a new fourth-generation mobile broadband network known as Long-Term Evolution over the next two years.
Founded in 2003 by cellular pioneer Craig McCaw, Clearwire was restructured in 2008 as part of a deal that combined the company with former Sprint Nextel Corp. (S) operations and included the first cash infusion from Sprint and partners that included Comcast Corp. (CMCSA, CMCSK), Intel Corp. (INTC), Time Warner Cable Inc. (TWC) and Bright House Networks LLC. Clearwire built the nation's first 4G network on a technological standard known as WiMax and is Sprint's provider of the zippier data service.
A spokesman for Sprint, which holds a 49% voting stake in the company, declined to comment.
The cable companies may also leave Clearwire soon as they appear to be retreating from offering wireless services. The companies recently reached an accord to sell Verizon Wireless a block of wireless airwaves, or spectrum, for about $3.9 billion and to resell the carrier's services in their stores.
In a regulatory filing this month, Clearwire said it may lose as much as 5% of the growth of its Clear brand Internet service as Time Warner Cable and Comcast halt those sales.
Comcast said it had no initial comment, and a Time Warner Cable spokesman said the company has no plans to sell Clearwire shares.
Intel has no plans to increase its holding in Clearwire, spokesman Chuck Mulloy said. Intel, which holds both Class A and Class B shares, has written down the value of its 65.6 million Class B shares to zero, he said. Intel doesn't disclose the value of its 28.4 million Class A shares, Mulloy said, but it's not material to the chip company. The combined holdings give Intel a 7.3% voting stake in Clearwire.
As of Dec. 31, Comcast held 88.5 million Clearwire Class B shares, or a 6.9% voting stake, according to Clearwire's annual report. Time Warner Cable's voting stake was 3.6%, or 46.4 million Class B shares.
Clearwire was forced to pay a 14.75% coupon on a $300 million bond offering in January, more than five percentage points higher than debt issued by even lower-rated bond issuers.
Clearwire Chief Executive Erik Prusch said last week that the company is close to securing $200 million in vendor financing, and it is due a $600 million payment from Sprint this year for unlimited access to its WiMax network.
-By Greg Bensinger, Dow Jones Newswires; 212-416-4676; firstname.lastname@example.org
--Shara Tibken contributed to this report.