Leap Wireless International Signs Agreement to Acquire 100% Ownership of Chilesat PCS
- Leap Plans to Expand Network and Services -
SAN DIEGO, April 13 /PRNewswire/ -- Wireless communications carrier Leap Wireless International, Inc. (Nasdaq: LWIN - news) today announced it has signed an agreement to increase its ownership of Chilesat Telefonia Personal S.A. (Chilesat PCS) from 50% to 100%. In a $50 million transaction, Leap will purchase the remaining 50% of Chilesat PCS from Telex-Chile, a Chilean telecommunications company, and its affiliate, Chilesat S.A. Chilesat PCS is a Chilean wireless carrier that launched commercial service in September 1998. Upon completion of the acquisition, Leap will take steps to recapitalize Chilesat PCS, which will allow it to expedite the planned expansion of the network and the services offered to its customers. Chilesat PCS's nationwide wireless network covers more than 80% of the population in the country of nearly 15 million people. Chilesat PCS employs nearly 315 people and had 27,000 subscribers as of Feb. 28, 1999, the end of Leap's second quarter of fiscal year 1999. The transaction is subject to certain conditions, including consent of the creditors of Telex-Chile and Chilesat S.A., and is expected to close within the next week. The transaction is structured with a US$28.0 million cash payment and a deferred payment obligation of US$22.0.
''We believe this acquisition will give us the opportunity to more expeditiously develop the potential of Chilesat PCS,'' said Harvey P. White, Leap's chairman and CEO. ''Leap believes in the Chilean wireless market, and we are now able to move forward on our plans to recapitalize Chilesat PCS, improve the network, increase our marketing efforts, and aggressively grow the business.'' Leap's purchase of Telex-Chile's interest resolves key issues for Chilesat PCS, which was experiencing short-term funding problems related to Telex-Chile's financial condition.
''We are extremely pleased that Leap is taking full ownership of Chilesat PCS,'' said Richard Sutherland, general manager of Chilesat PCS. ''We have had a strong, positive relationship with Leap and anticipate that our relationship will grow even stronger now that Leap will be even more involved in the operation. Leap's marketing, financial and operational strengths will enable us to meet the market demand for high-quality wireless services in Chile.''
About Leap Wireless International
Leap Wireless International, Inc., headquartered in San Diego, California, is a wireless communications carrier that deploys, owns and operates wireless networks in domestic and international markets with strong growth potential. In conjunction with its strategic partners, Leap has launched all-digital wireless networks in the United States, Mexico and Chile, and plans to offer service in Russia and Australia through its operating companies. Leap is dedicated to bringing the benefits of reliable, cost-effective and high-quality voice and data services to domestic and emerging markets. For more information, please visit www.leapwireless.com.
This news release contains certain ''forward-looking statements,'' including statements regarding the future scope of the Chilesat PCS network. Forward-looking statements, which are based upon certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words ''believe,'' ''expect,'' ''intend,'' ''plan,'' ''anticipate,'' ''estimate,'' ''project'' or similar expressions. The ability of the Company to predict actual results and other future events is inherently uncertain. Important factors which may cause actual results to differ materially from the forward-looking statements contained herein or in other public statements by the Company are described in the section entitled ''Risk Factors'' in the Company's 1998 10-K, most recent 10-Q and other documents on file with the Securities and Exchange Commission. Those factors most likely to cause actual results to differ include but are not limited to: the availability of debt and equity capital, international market risks, currency fluctuations, uncertainties relating to costs and profitability of development stage companies, and the substantial leverage of Leap Wireless and its operating companies.
SOURCE: Leap Wireless International, Inc. |
