Re: Nextwave- It is my understanding that the Fair Market Value of the licenses was determined to be $906 million vs. the $4.7 billion originally assessed by the FCC at the time of transfer in January of 1997. This reduces NW's debt outstanding to the FCC from approximately $4.2 billion to approximately $550 million, with the final numbers in the details of the ruling. The extra $142M I believe is the 3% penalty for the default on the original bid. That hasn't been waived.
In 1998 Q recorded a $20 noncash charge to write off the Nextwave investment. I don't know what happens next, any accountants here?
Page 48 of the Annual report says:
Nextwave Telecom Inc. In November of 1995, the Company paid $5 million to purchase 1,666,666 shares of series B Common Stock and provided a $25 Million short-term note to Nextwave. As part of the purchase, the company also received warrants to buy 1,111,111 additional shares of series B common stock at $3 per share. During March 1996, the company converted $15 million of the note receivable into 5,000,000 shares of series B common stock. The conversion was treated as a non-cash transaction for the consolidated statement of cash flow.
In June 1998, the company recorded a $20 million non-cash charge to write-off its investment in NextWave. Subsidiaries of NextWave file for bankruptcy protection in June 1998 under Chapter 11 of the US Bankruptcy code. There is significant uncertainty as to the outcome of the bankruptcy proceedings.
As I said, who can figure this out WHEN the shares become worth something. But it looks to me as though we still own 7,777,7777 shares of Nextwave.
Caxton |
