Clearwire talks capacity with AT&T, Verizon, others

NEW YORK Thu Sep 22, 2011 5:03pm EDT

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NEW YORK (Reuters) - Clearwire Corp is in talks with U.S. wireless operators, including AT&T Inc and Verizon Wireless, about selling network capacity while it also eyes raising new funding through equity, debt and vendor financing, according to top company executives.

Clearwire, which needs $900 million in new funding, is also open to selling wireless spectrum, but is not running a sale process, Chief Financial Officer Hope Cochran told Reuters.

Asked for specifics on the capacity talks, Chief Executive Eric Prusch told Reuters: "We're talking to everybody."

Along with AT&T and Verizon it would also be fair to say the talks include smaller operators such as Leap Wireless International Inc and MetroPCS Communications Inc, spokeswoman Susan Johnson said.

Clearwire shares closed up nearly 8 percent on Nasdaq after falling as much as 10 percent earlier in the session.

The wireless operator, which is majority owned by Sprint Nextel Corp, has said it needs about $900 million in funding, including $600 million to upgrade its network and up to $300 million to keep the business operating.

While some investors worried the company was casting a wide net because it was unsure any single funding option would work, Cochran told Reuters she favored a balanced approach.

The executive said Clearwire could fund the equipment it needs for its network upgrade with roughly $300 million in vendor financing, where the vendor would offer a loan for the value of the equipment as part of the sale agreement.

But she said the company would be careful to ensure it has the rest of its financing in place before buying equipment for an upgrade.

This could include roughly $300 million in equity investment from a strategic partner, which would allow Clearwire to raise more debt.

Cochran said the company's agreements would allow it to raise up to 50 cents more in debt for every $1 of new equity investment it attracts, up to a debt ceiling of $280 million.

(Reporting by Sinead Carew; editing by Gunna Dickson and Andre Grenon)

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