Clearwire (CLWR) Agrees to Raise $1.56B in New Investment Capital from Sprint, Comcast, Time Warner Cable, Intel

November 10, 2009 9:08 AM EST

Clearwire Corporation, (NASDAQ: CLWR) announced today that it has executed a definitive agreement to raise $1.564 billion in new investment capital from Sprint Nextel Corporation, Comcast Corporation, Time Warner Cable Inc., Intel Corporation, Eagle River Holdings, LLC and Bright House Networks, LLC in exchange for newly issued shares priced at $7.33 per share.

"This additional level of strategic funding marks another important milestone in the progress of Clearwire, and will enable us to maintain our leadership and aggressive 4G WiMAX network build plans," said Bill Morrow, CEO of Clearwire. "Today's news is also further validation of the importance of our 4G network to our strategic investors. We all benefit from this robust, all-IP, high-bandwidth network that delivers an unmatched combination of Internet speed and mobility.”

Morrow continued, “While we are very pleased to have every one of our investors, we are particularly pleased and honored that Sprint Nextel, Comcast, Time Warner Cable, Intel, Eagle River and Bright House Networks have decided to provide this additional round of strategic financing. Together, we share a common vision of providing consumers and businesses with a new category of Internet service capable of meeting the growing demand for mobile data.”

Participants in the new round of equity financing include Sprint Nextel for $1.176 billion, Comcast for $196 million, Time Warner Cable for $103 million, Intel for $50 million, Eagle River for $20 million and Bright House Networks for $19 million. Closing of the equity financing is subject to certain closing conditions, including, with respect to a portion of the financing, the lapsing of the time period required under applicable law for the effectiveness of the stockholder written consent approving the transactions, which has been executed. Clearwire will receive approximately $1.057 billion in cash from the equity financing within five business days, $440 million in cash will be funded at a closing which is targeted to be completed by year end 2009, and the remaining $66 million will be funded at a closing which is targeted to be completed during first quarter 2010.

The investors in the financing round will receive newly issued Class B Units/Class B Shares, which will maintain pass through tax treatment for their investments. Newly issued Class B Units/Class B Shares will have the same economic and voting rights as existing Class B Units/Class B Shares and equivalent voting rights as existing Class A Common Stock.

Clearwire also announced plans to launch an offering for a minimum of $1.45 billion in new Senior Secured Notes with net proceeds to be used to pay off the company’s existing $1.40 billion credit facility. The Senior Secured Notes will be offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and to non-U.S. persons in accordance with Regulation S under the Securities Act.

Sprint Nextel and Comcast, which are debt investors under Clearwire’s existing facility, have agreed to receive replacement debt on the same terms as the new offering, effectively allowing Clearwire to raise an additional $240 million in capital assuming the new notes offering is fully subscribed. Although specific terms are still to be finalized, the new debt offering is intended to improve several of the Company’s existing credit terms by extending maturity and establishing a fixed interest rate. In addition, with an improved capital structure the Company expects to expand its future borrowing capacity.

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