GoQ* and thread,
Prudential Securities issued an update on the NXTL/NextWave/GBLX interplay and reiterated their STRONG BUY rating on Nextel. Below is a synopsis and some excerpts from the fairly lengthy article:
Summary
** NextWave, a bankrupt C and F block PCS licensee, has submitted a new plan of re-organization. That plan includes two credible, significant backers and, according to NextWave, leaves the FCC unimpaired.
-Global Crossing: $600 MM
-Liberty Media : $300 MM
-Additional $600 MM is being secured from existing lenders, equity holders and new investors
-Thus, according to NextWave's comments, the company will have significant capital available to pay the FCC so that the latter is no longer an impaired creditor. (Unimpaired creditors have no unsatisfied claims against a bankrupt entity, and do not have a vote at confirmation.)
-The FCC was opposed to the new re-organization plan.
-The Second Court of Appeals must rule. Previously, in late November, the Second Court of Appeals issued a one-sentence ruling which altered the amount of money owed to FCC. However, it is not known at this writing how much is now owed or if NextWave has the rights to the licenses at all.
** Bottom line: it doesn't look good for Nextel to get the licenses, although the tide has turned several times in the last six months. This will likely be a long and drawn-out process.
** We (Prudential) believe that 3 scenarios could evolve from this point on, and in aggregates, Nextel has about 20-30% chance of getting the licenses from NextWave:
- NextWave goes ahead with its re-organization plan and all debtors agree or are forced to agree to it > - likelihood of occuring: 60%
- The licences revert back to FCC - likelihood of occurring: 20%
- Nextel submits its own plan or re-organization - least likely of all; likelihood of occurring: 10%
- Wild card - anything goes: 10%
** Where do we go from here? - The next data point will likely be the ruling from the Second Court of Appeals. If that occurs in the short-term, we expect comments to be filed with the bankruptcy court by December 30, 1999 (at 2 pm). The bankruptcy court will then hold a confirmation hearing (as long as there has been a ruling by the Second Court of Appeals on January 5, 2000, at 2 pm).
Well, we (Prudential) still like Nextel without the NextWave spectrum.....(voice fading away; sobbing uncontrollably - ibexx ed.).
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i-GBLx |
