NEW YORK, April 25 Clearwire Corp, a
U.S. wireless service provider which is majority owned by Sprint
Nextel, said on Thursday it would have enough cash to fund
its operations until the first quarter of 2014 if it does not
raise any additional financing.
However the company said on its quarterly conference call
that it would need to stop high-speed wireless network upgrade
and also make other cost cuts in order to stay afloat until the
first quarter. Clearwire also announced a narrower operating
loss even as its revenue declined.
Clearwire, which agreed in December to be bought out by
Sprint for $2.97 per share, told analysts that deal would go
ahead even if Sprint reneged on its October agreement to sell 70
percent of its shares to Japan's SoftBank Corp for
Since both these agreements were forged, satellite
television provider Dish Network announced a $3.30 per
share counter bid for Clearwire in January, leading investors
hoping that Clearwire would receive a sweeter bid.
Then Dish made a $25.5 billion bid for Sprint on April 16 in
a challenge to SoftBank and said it had not formally withdrawn
its Clearwire offer but would honor the original Sprint deal
with Clearwire if it is successful in buying the company.
Clearwire, which called a special meeting on May 21 for a
shareholder vote on the Sprint bid, said is still evaluating a
bid from its biggest rival Verizon Wireless for $1
billion to $1.5 billion of its spectrum.
Clearwire can draw on $80 million of financing from Sprint
in May but if shareholders vote against the Sprint deal on May
21, it would have to forego another $400 million of funding
available from Sprint under their December agreement.
Clearwire declined to comment during the conference call on
a recent announcement that it was considering defaulting on a
$255 million interest payment due on June 1.
Analysts see this as a negotiating tactic that could lead to
a higher offer from Sprint.
"All investors eyes are focused on a potential sweetened
offer from Sprint and the next scheduled interest payment date
of June 1. That's leverage," said Roe Equity Research analyst
Clearwire said its first quarter loss narrowed to $303.69
million from $421.89 million. Revenue fell to $318 million from