FWIW....comments from Q's 2001 10K.
The real question for Nextwave is if they are going to be able to reraise the cash they had been promised in '01 (including $300 million from Q and $2.5 Billion from UBS Warburg).
edgar-online.com
NextWave Telecom Inc.
In November 1995, we purchased 1,666,666 shares of Series B common stock in Next Wave Telecom Inc. (Next Wave ), a privately-held company, for $5 million. As part of the share purchase, we received warrants to buy 1,111,111 additional shares of Series B common stock at $3 per share. During March 1996, we converted a $15 million note receivable into 5,000,000 shares of Series B common stock. In June 1998, we recorded a $20 million impairment charge related to our investment in Next Wave . Subsidiaries of Next Wave filed for bankruptcy protection in June 1998 under Chapter 11 of the United States Bankruptcy Code. Next Wave itself filed for bankruptcy protection in December 1998 under Chapter 11 of the United States Bankruptcy Code.
In August 2001, Next Wave filed a plan of reorganization with the United States Bankruptcy Court which requires total financing of approximately $5 billion to build-out an advanced 3G wireless network. The plan provides for payment of all valid claims against Next Wave , including the claim of the FCC for the PCS
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licenses it granted to Next Wave in 1997, plus interest as applicable. The plan also provides that Next Wave’s debt for its C-block and F-block PCS licenses would be reinstated, with the government receiving all amounts due up to this point, in full, with the remaining balance to be paid in installments. Under this plan, Next Wave indicated that it expects to construct wireless networks in 95 markets utilizing CDMA2000 1xEV-DO technology.
During fiscal 2001, we sold 150,000 shares of Next Wave series B common stock and recorded a realized gain of $1 million. At September 30, 2001, we owned 6,516,666 shares of Series B common stock and held warrants to purchase 1,111,111 shares of Series B common stock for $3 per share. We also held a $0.4 million promissory note convertible into 1,019,444 shares of Series C common stock.
In August 2001, we committed to purchase 2,000,000 shares of Series A preferred stock in the reorganized Next Wave for $300 million. Our investment was subject to approval by the United States Bankruptcy Court, successful consummation of Next Wave ’s August 2001 plan of reorganization, satisfactory resolution of all disputes involving Next Wave ’s PCS licenses and other conditions. Furthermore, our obligation to make this investment was subject to approval by the Bankruptcy Court on or before October 31, 2001 of the terms and conditions of our investment, as well as a certain Technology Cooperation Agreement dated as of August 15, 2001, as amended, between Next Wave and us. Next Wave also was entitled to terminate the investment commitment if a certain break-up fee contained in the subject Subscription Agreement was not approved by the Bankruptcy Court on or before October 31, 2001. The approvals required by October 31, 2001 have not been obtained, and we are entitled to terminate our investment agreement with Next Wave . Furthermore, on November 8, 2001, Next Wave’s bankruptcy counsel publicly announced that a settlement with the FCC had been reached pursuant to which Next Wave would relinquish its C-block and F-block PCS licenses in return for a cash payment from the FCC. Next Wave’s bankruptcy counsel indicated that if the settlement receives the necessary approvals, then Next Wave intends to file a new plan of reorganization which takes into account the terms of the settlement. Our $300 million commitment is dependent on Next Wave pursuing the plan of reorganization filed in August, 2001. Accordingly, if Next Wave does abandon the plan filed in August, 2001 and proceeds with a new plan, then we will not be obligated to make the investment. As a result of the uncertainty surrounding Next Wave’s financing plans, the terms of the settlement announced November 8, 2001 and other factors, there is significant uncertainty as to whether we will have the opportunity to make our planned investment in a reorganized Next Wave. |
