NEW YORK Oct 10 Virgin Mobile USA Inc, a venture of Sprint Nextel Corp (S.N) and Richard Branson's Virgin Group [VA.UL], raised $412.5 million on Wednesday, with an initial public offering that priced at the low end of expectations.
The pay-as-you-go mobile service provider, which focuses on the youth market, sold 27.5 million shares for $15 per share, compared with a forecast range of $15 to $17, according to a person familiar with the matter.
Underwriters, led by Lehman Brothers, Merrill Lynch and Bear Stearns, have the option to buy another 4.1 million shares to cover overallotments.
Under the IPO, about 44 percent of the company is being floated to new investors. Sprint Nextel will have a reduced stake of about 17.2 percent after the offering, and Branson's group, about 35.7 percent.
The Warren, New Jersey-based company, said it will use proceeds largely to repay debt and to buy out 16.7 percent of Sprint Nextel's interest, in a filing with the U.S. Securities and Exchange Commission.
Virgin Mobile USA's shares are expected to begin trading on the New York stock exchange on Thursday, under the stock symbol "VM." VM.N
(Reporting by Lilla Zuill and Sinead Carew)