Clearwire Dips Into Sprint Funds Again

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Clearwire Dips Into Sprint Funds Again

Clearwire Corporation (NASDAQ:CLWR) has dipped into another $80 million installment payment made by Sprint Nextel Corporation (NYSE:S) under the terms of what was supposed to be a proposed buyout deal. The move could jeopardize the counteroffer made by DISH Network Corp. (NASDAQ:DISH).Sprint Clearwire

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Sprint Nextel Corporation (NYSE:S) offered to pay $2.2 billion in December for the part of Clearwire it didn’t already own. Part of that deal was $800 million in upfront financing, which could be drawn on over a period of 10 months.

In January and February, Clearwire Corporation (NASDAQ:CLWR) decided now to accept the payments from Sprint because it still wanted to discuss options with DISH Network Corp. (NASDAQ:DISH) as well as Sprint Nextel.

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However, The Wall Street Journal reports that the cash-strapped carrier drew $80 million from the financing this month and announced today that it would take another payment in April.

Dish Network has said it may pull back its offer if Clearwire Corporation (NASDAQ:CLWR) continues to accept funding from Sprint Nextel.  The company is against Sprint’s financing because it can be converted to stock at only $1.50 per share, and even then only under specific circumstances. The deal also gives Sprint the opportunity to raise its stake in Clearwire every time the company makes use of the cash.

Clearwire has not said whether it will accept any more payments from Sprint, but it has said that it will continue to negotiate with DISH Network Corp. (NASDAQ:DISH).

Shares of Clearwire Corporation (NASDAQ:CLWR) were trading mostly flat Thursday afternoon, while shares of Sprint Nextel Corporation (NYSE:S) rose 2.6 percent.

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@valuewalk.com.
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