Clearwire Corporation, a provider of advanced, high-speed Internet services to consumers and businesses, has announced a definitive agreement to raise $1.564 billion in new investment capital to continue the expansion of its 4G mobile Internet services.

 

According to officials with Clearwire, the investment capital will be raised from Sprint (News - Alert) 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.

 

Bill Morrow, CEO of Clearwire said this strategic funding will enable Clearwire to maintain its 4G WiMAX (News - Alert) network build plans and the all-IP, high-bandwidth network will deliver an unmatched combination of Internet speed and mobility.

 

The new round of equity financing includes partners like Sprint Nextel for $1.176 billion, Comcast for $196 million, Time Warner Cable for $103 million, Intel (News - Alert) 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.

 

Clearwire (News - Alert) will receive nearly $1.057 billion in cash from the equity financing within five business days, $440 million in cash will be funded at a closing targeted to be completed by year end 2009. The remaining $66 million will be funded at a closing 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. These 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. Sprint Nextel (News - Alert) and Comcast, which are debt investors under Clearwire’s existing facility, will receive replacement debt on the same terms as the new offering. This enables Clearwire to raise an additional $240 million in capital assuming the new notes offering is fully subscribed.

 

Clearwire also said the company is planning to launch an offering for a minimum of $1.45 billion in new Senior Secured Notes. The net proceeds from this will be used to pay off Clearwire’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.