RESTON, Va., June 6, 2017 /PRNewswire/ -- NII Holdings,
Inc. (NASDAQ: NIHD) and AINMT Holdings AB ("AINMT"), an
international telecommunications company and parent of the
Norwegian operator ice, the fastest growing mobile network operator
in Norway, announced today that
they have entered into an agreement to jointly own and operate
Brazilian mobile telecommunications company Nextel Brazil.
Initially and subject to certain conditions, AINMT will invest
$50 million for a 30% stake in Nextel
Holdings S.à r.l. (the "Company"), a wholly-owned subsidiary of
NII, which owns Nextel Brazil. AINMT will have the option to invest
an additional $150 million in the
Company. If such option is exercised, AINMT's total $200 million new equity investment would result
in a 60% controlling stake in the Company. NII will contribute
capital in accordance with the Investment Sequencing described
below and retain a 40% stake in the Company if AINMT exercises its
option.
The newly-formed partnership will benefit from AINMT's
significant experience in the telecom space and financial backing
from AINMT's shareholders, including Access Industries, a global
technology, media and telecom and industrial group. The partnership
is expected to provide Nextel Brazil with a significant increase in
capital to revitalize the business and enable it to pursue a growth
strategy that NII could not fund alone.
Assuming AINMT's option to make the additional $150 million investment is exercised, Nextel
Brazil would have an enhanced financial profile to pursue a newly
developed commercial strategy that contemplates continued
investments in Nextel Brazil's key markets with a focus on
expanding its subscriber base.
Brazilian consumers will benefit from the combination of two
leading telecommunications companies focused on the consumer
experience and enhanced offerings in an evolving data-driven
wireless market. A stronger Nextel Brazil will be able to provide
consumers with more alternatives, better service and best practices
currently being deployed by AINMT in Scandinavia.
In announcing the transaction, Steve
Shindler, NII's CEO said, "We are excited to partner with
AINMT as it continues to export its customer-centric and LTE-driven
model to highly populated emerging markets around the globe. We
believe that gaining access to their differentiated approach and
data-driven strategy will allow Nextel Brazil to significantly
expand both its growth and profitability."
AINMT's CEO, JD Fouchard, said, "Nextel Brazil offers ideal
conditions for AINMT to implement its successful operating model.
The spectrum holdings at multiple frequencies and the 2.9 million
3G/LTE subscribers Nextel already has in Brazil provide a solid foundation of assets on
which to build, expanding the LTE network footprint and profitably
growing the subscriber base. Our investment in Nextel Brazil
represents a great opportunity and we welcome our new partnership
with NII. We believe in the power of mobile broadband and
associated services to bring fresh innovation, growth and
development to the Brazilian market. We are always striving to
improve and make a positive difference to the lives of our
customers and the economic well-being of the communities we
serve."
NII has undergone numerous transformational initiatives in the
past 18 months to turn around and stabilize Nextel Brazil's
operations through improvements in its cost structure and a
significant reduction in churn. As a result of these actions,
Nextel Brazil has delivered five consecutive quarters of positive
adjusted OIBDA1.
Newly appointed CEO of Nextel Brazil, Roberto Rittes, said, "We
welcome this investment, which will significantly strengthen our
strategic and operational options and capabilities. It also enables
a renewed focus on growing our 3G and LTE business by attracting
and retaining customers who value the high quality wireless
services we offer."
The new partnership between NII and AINMT will enhance the
trajectory of the business, offering a number of advantages to
improve its competitive position:
- newly developed and state-of-the-art data-centric wireless
networks;
- high quality spectrum position with LTE capabilities in
Rio de Janeiro and São Paulo;
- an attractive subscriber base with the highest ARPU in
Brazil;
- a well-known, respected brand with leading Net Promoter
Score2;
- over $200 million in new growth
capital, assuming both stages of AINMT's investments are
completed;
- backing of AINMT's majority shareholder, Access Industries;
and
- the addition of AINMT team members with extensive telecom
expertise and a track record of turnarounds.
The transaction will take place in two key steps ("Investment
Sequencing"):
Step 1:
AINMT will conduct a $50 million
share issuance, underwritten by AINMT's existing shareholders,
including Access Industries, to fund the initial investment. By the
first closing, NII will have contributed to the Company all of its
freely distributable cash and proceeds from the return of its
escrow from the sale of Nextel Mexico ("Mexico Escrow"), except for
$50 million in cash that will remain
at NII. NII has also agreed to contribute future proceeds
from the Mexico Escrow. NII will retain a 70% interest in the
Company and AINMT will hold a 30% interest.
Closing of Step 1 is subject to (a) approval by AINMT and AINMT
AS shareholders, (b) contribution to the Company of the assets of
NII International Mobile S. à r.l. and confirmation of the tax
treatment of such contribution, (c) Brazilian antitrust approval,
and (d) reasonable acceptance by AINMT of updated disclosure
schedules.
Step 2:
In a second step, AINMT will have an option, exercisable by
November 15, 2017, to invest an
additional $150 million to increase
its ownership in the Company to 60%. The option is conditioned upon
receiving certain concessions from Nextel Brazil's lenders. If
AINMT elects to exercise its option, NII will ask its shareholders
to vote in favor of the transaction. The second step of the
transaction must be completed by January 31,
2018, and the Company anticipates the transaction to close
by the first quarter of 2018. At that time, NII stockholders are
expected to hold a 40% stake in the Company.
Closing of the transaction is subject to amendment of Nextel
Brazil's credit facilities and release and substitution of certain
existing guarantees, as well as other customary closing conditions,
including regulatory and antitrust approvals, approval from NII's
stockholders and third-party approvals.
NII was advised by Jones Day and
Mattos Filho. Rothschild acted as
NII's exclusive financial advisor.
This press release includes a statement on OIBDA, which is a
financial metric calculated and presented on the basis of
methodologies that are not in accordance with U.S. Generally
Accepted Accounting Principles, or GAAP. Management, as well
as certain investors, use non-GAAP financial measures to evaluate
NII Holdings' current and future financial performance. The
non-GAAP financial measure included in this press release does not
replace the presentation of NII Holdings' GAAP financial results.
OIBDA provides supplemental information to assist investors in
analyzing NII Holdings' financial position and results of
operations. NII Holdings has chosen to provide this information to
investors to enable them to perform meaningful comparisons of past,
present and future operating results and as a means to emphasize
the results of core on-going operations. Reconciliations of the
non-GAAP financial measure provided in this release to the most
directly comparable GAAP measures are provided below. To view
this and other reconciliations of non-GAAP financial measures that
NII Holdings uses, visit the investor relations link
at www.nii.com.
Investor Call
NII and AINMT will host a joint investor conference call to
discuss the partnership and new equity investment at 11:00am EST on June
6th, 2017. Participants may dial the following
access numbers: US:
800-768-3395 | Brazil: 0800-038-5060
| Norway: 8001-9903 | Sweden:
02079-6588 | UK: 0800-496-0495 |
Password: NII
About NII Holdings, Inc.
NII Holdings, Inc., a publicly held company based in
Reston, Virginia, is a provider of
differentiated mobile communication services for businesses and
high value consumers in Brazil.
NII Holdings, operating under the Nextel brand, offers fully
integrated wireless voice services, data services and wireless
Internet access. Visit NII's website at www.nii.com.
Visit NII Holdings' news room for news and to access our
market's news center: www.nii.com/newsroom.
About Nextel Brazil
Nextel Brazil provides wireless communication services under the
Nextel™ brand in Brazil with principal operations located in
major urban and suburban centers with high population densities and
related transportation corridors of the country where there is a
concentration of Brazil's business
users and economic activity, notably Rio
de Janeiro and São Paulo.
About AINMT
AINMT is an international telecommunications company. Its focus
is wireless data communication services, the fastest growing
business segment within the telecom sector. AINMT's Norwegian
operation, ice.net, is Norway's third largest mobile network
operator and fastest growing provider of voice and
wireless data services operating on 4G-only networks for
smartphones and mobile broadband. Today, the company is
well established in Scandinavia (Norway, Sweden and Denmark) and has recently launched
4G networks in Indonesia and
the Philippines. For more information,
visit www.ainmt.com
About Access Industries
Access Industries is a privately held, U.S.-based industrial
group with global strategic investments. Founded in 1986
by Len Blavatnik, an American entrepreneur and philanthropist,
the group is headquartered in New
York, with offices in London and Moscow. Access invests in
industries where it can maximize long-term value by developing
regional and global leaders. Its industrial focus spans four
key sectors: natural resources and chemicals; media and
telecommunications; real estate and hospitality; and venture
capital. For more information,
visit www.accessindustries.com.
Additional Information and Where to Find It
In the event AINMT exercises the option to invest an additional
$150 million in the Company in the
second stage of the transaction, NII Holdings Inc. intends to file
with the Securities and Exchange Commission ("SEC") a proxy
statement in connection with that contemplated transaction. The
definitive proxy statement will be sent to NII's stockholders and
will contain important information about the contemplated
transaction. INVESTORS AND STOCKHOLDERS ARE URGED TO READ CAREFULLY
AND IN THEIR ENTIRETY THE PROXY STATEMENT AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE. Investors
and stockholders may obtain a free copy of the proxy statement
(when it is available) and other documents filed with the SEC at
the SEC's website at www.sec.gov.
Certain Information Concerning Participants
In the event AINMT exercises the option to invest an additional
$150 million in the Company in the
second stage of the transaction, NII and its directors and
executive officers may be deemed to be participants in the
solicitation of proxies from stockholders of NII in connection with
the contemplated transaction. Information about NII's directors and
executive officers is set forth in its proxy statement for its 2017
Annual Meeting of Stockholders and its most recent annual report on
Form 10-K. These documents may be obtained for free at the SEC's
website at www.sec.gov. Additional information regarding the
interests of participants in the solicitation of proxies in
connection with the contemplated transactions will be included in
the proxy statement that NII intends to file with the SEC in the
event AINMT exercises its option in the second stage of the
transaction.
Safe Harbor Statement
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995. This news release includes "forward-looking
statements" within the meaning of the securities laws. The
statements in this news release regarding the partnership in Nextel
Brazil, including the successful completion of the partnership, the
ownership of NII and AINMT in the partnership and the cash
available to be invested through the partnership in Nextel Brazil;
Nextel Brazil's business and economic outlook; Nextel Brazil's
future performance and forward-looking guidance, as well as other
statements that are not historical facts, are forward-looking
statements. Forward-looking statements are estimates and
projections reflecting management's judgment based on currently
available information and involve a number of risks and
uncertainties that could cause actual results to differ materially
from those suggested by the forward-looking statements. With
respect to these forward-looking statements, management has made
assumptions regarding, among other things, NII's ability to
complete the proposed transaction in a timely fashion or at all,
including receiving the required regulatory and shareholder
approvals and the amount of cash available to NII to invest in the
partnership, NII's ability to modify its loan and other agreements
as required to complete the transaction, NII's ability to meet its
business plans, customer growth and retention, pricing, network
usage, operating costs, the timing of various events, the economic
and regulatory environment and the foreign currency exchange rates
that will prevail during 2017. Future performance cannot be assured
and actual results may differ materially from those in the
forward-looking statements. Some factors that could cause actual
results to differ include the risks and uncertainties relating to:
the consummation of the partnership in the expected timeframe, if
at all, the impact of liquidity constraints, including the ability
to access escrowed and pledged funds when expected, the ability to
reach agreement with lenders on amendments to the terms of
financing arrangements, the ability to satisfy the conditions of
the partnership, the impact of more intense competitive conditions
and changes in economic conditions in Brazil, the performance of Nextel Brazil's
networks, the ability to provide services that customers want or
need, the ability of NII to continue as a going concern, NII's
ability to execute its business plan for Nextel Brazil, and the
additional risks and uncertainties that are described in NII's
Annual Report on Form 10-K for the period ended December 31, 2016, as well as in other reports
filed from time to time by NII with the SEC. This press release
speaks only as of its date, and NII disclaims any duty to update
the information herein.
Non-GAAP Reconciliations
Adjusted OIBDA
Operating income before depreciation and amortization, or OIBDA,
represents operating (loss) income before depreciation and
amortization expense. Adjusted OIBDA represents operating income
before depreciation expense, amortization expense, material
non-cash asset impairments, severance costs associated with
publicly announced restructuring plans and other material
non-recurring or unusual charges. Adjusted OIBDA is not a
measurement under accounting principles generally accepted in
the United States, may not be
similar to adjusted OIBDA measures of other companies and should be
considered in addition to, but not as a substitute for, the
information contained in our statements of operations. We believe
that adjusted OIBDA provides useful information to investors
because it is an indicator of our operating performance, especially
in a capital intensive industry such as ours, since it excludes
items that are not directly attributable to ongoing business
operations. Adjusted OIBDA can be reconciled to operating
loss as follows:
|
For the Three
Months
Ended
|
|
For the Three
Months
Ended
|
|
For the Three
Months
Ended
|
|
For the Three
Months
Ended
|
|
For the Three
Months
Ended
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
|
March
31,
|
US$ and BR R$ in
thousands
|
2016
|
|
2016
|
|
2016
|
|
2016
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss(US$)
|
$
(39,331)
|
|
$
(16,480)
|
|
$(1,336,138)
|
|
$
(50,162)
|
|
$
(72,345)
|
Depreciation
(US$)
|
29,203
|
|
28,809
|
|
65,472
|
|
9,366
|
|
8,886
|
Amortization
(US$)
|
9,623
|
|
10,683
|
|
11,538
|
|
3,993
|
|
4,139
|
OIBDA
(US$)
|
(505)
|
|
23,012
|
|
(1,259,128)
|
|
(36,803)
|
|
(59,320)
|
Reversal of accrued
tax contingency (US$)
|
-
|
|
(8,133)
|
|
-
|
|
-
|
|
-
|
Asset impairment
charges(US$)
|
1,010
|
|
7,243
|
|
1,276,543
|
|
23,648
|
|
68,380
|
Restructuring charges
(US$)
|
3,255
|
|
2,001
|
|
6,221
|
|
20,689
|
|
3,313
|
Adjusted OIBDA
(US$)
|
$
3,760
|
|
$
24,123
|
|
$
23,636
|
|
$
7,534
|
|
$
12,373
|
|
|
|
|
|
|
|
|
|
|
Average quarterly
exchange rate
|
3.91
|
|
3.51
|
|
3.25
|
|
3.29
|
|
3.13
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA (BR
R$)
|
R$ 14,702
|
|
R$ 84,672
|
|
R$ 76,817
|
|
R$ 24,787
|
|
R$ 38,727
|
|
|
|
|
|
|
|
|
|
|
1 Adjusted operating income before depreciation
and amortization, or adjusted OIBDA, represents operating income
before depreciation expense, amortization expense, material
non-cash asset impairments, severance costs associated with
publicly announced restructuring plans and other material
non-recurring or unusual charges.
2 Based on Worthix market intelligence (methodology
analogous to Net Promoter Score).
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nii-holdings-and-ainmt-announce-partnership-to-invest-in-nextel-brazils-growth-strategy-300469122.html
SOURCE NII Holdings, Inc.