Thursday December 16 7:44 PM ET
NextWave Gets $1.6 Billion From Investor Group
NEW YORK (Reuters) - Bankrupt wireless telephone company NextWave Telecom Inc. on Thursday modified its
reorganization proposal after several high-profile investors gave it more than $1.6 billion, which would help it build its
advanced wireless network.
The investors included undersea fiber-optic cable builder Global Crossing Ltd.(NasdaqNM:GBLX - news), based in
Hamilton, Bermuda, and Liberty Media Group (NYSE:LMGa - news),the television programming arm of AT&T Corp
(NYSE:T - news). Other investors include Texas Pacific Group and Pacific Capital Group.
The new funds ``will provide an equity infusion so we can move forward and hopefully get the network built and get
going,' said NextWave spokesman Michael Regan.
``By investing in NextWave, with a strategic set of partners, Liberty Media has a unique opportunity to be on the
ground floor of the wireless Internet explosion,' said Liberty Media Chief Executive Robert Bennett.
Representatives of some of the investors, such as Global Crossing, Pacific Capital Group and Texas Pacific Group, will
join NextWave's board after NextWave's reorganization plan is effective.
In addition to being an investor, Global Crossing also will be NextWave's preferred provider of local, long-distance,
and international network capacity and Web hosting services.
``NextWave is building the next-generation, local-access network that will be a natural complement to our global next-
generation network,' said Robert Annunziata, Global Crossing's CEO.
NextWave's reorganization plan has been tied up by various legal and regulatory battles.
NextWave had bid $4.7 billion for the valuable licenses that serve the latest generation of wireless phones in a 1996
government auction, but filed for bankruptcy in 1998 after paying just $474 million of what it owed.
The licenses would allow NextWave to offer wireless telephone services in 95 areas around the country.
The bankruptcy court later valued the spectrum licenses at just over $1 billion. The Federal Communications
Commission (FCC) appealed that move and questioned the bankruptcy court's authority to reduce NextWave's
obligations.
In November, the Appeals Court for the Second Circuit reversed the bankruptcy court's decision and returned the case
to the Bankruptcy Court for the Southern District of New York, which is presiding over the Hawthorne, N.Y.-based
NextWave's reorganization.
The Appeals Court said in November it planned to issue a lengthier opinion on the case, but it has not done so yet.
NextWave said on Thursday that if it is ultimately found liable for the full amount of the wireless licenses, and there were
no further appeals, then its proposal calls for it to reinstate the debt and pay the full amount.
``If we're liable for full judgement...we are proposing to reinstate the original $4.7 billion note,' Regan said.
NextWave said the bankruptcy court set a confirmation hearing for Jan. 5. That hearing is subject to the receipt of either
the opinion of the Appeals Court or an order from the Appeals Court allowing confirmation to proceed.
Analysts said NextWave's new proposal would be a blow to wireless carrier Nextel Communications Inc.
(NasdaqNM:NXTL - news), which had sought to obtain NextWave licenses for $2 billion. In October, The Wall Street
Journal reported Nextel would be willing to pay at least $6 billion to buy the valuable licenses.
Shares of Nextel fell 6-1/16 to close at 92-15/16 Thursday on Nasdaq.
NextWave, with its deep-pocketed investors, would now be a stable, new national rival to Nextel.
The new bankruptcy proposal also modifies the treatment of general unsecured creditors, who now will be entitled to
cash payment of the full amount of their allowed claims, NextWave said.
Phil |
