Item 1.01.
|
Entry into a Material Definitive Agreement.
|
On March 18, 2019, NII Holdings, Inc. (NII) and NII International Holdings S.à r.l. (NIIH), a wholly owned
subsidiary of NII, entered into a purchase agreement (the Purchase Agreement) with América Móvil, S.A.B. de C.V. (AMX) and AI Brazil Holdings B.V. (AI Brazil), pursuant to which NII and AI Brazil
will sell their jointly-owned wireless operations in Brazil (Nextel Brazil). Specifically, NIIH will sell all of the issued and outstanding shares of NII Brazil Holdings S.à r.l. (NIIBH, and such shares, together with
any shares of NIIBH issued after the date of the Purchase Agreement, the Acquired Equity Interests) to AMX (the Nextel Brazil Transaction). Also pursuant to the Purchase Agreement, concurrent to, and as a condition of, the
consummation of the Nextel Brazil Transaction, AI Brazil will sell all of its interests in Nextel Holdings S.à r.l. (Nextel Holdings) to NIIBH (the AI Brazil Transaction). At the closing of the Nextel Brazil
Transaction and the AI Brazil Transaction, AMX will indirectly own all of the issued and outstanding shares of Nextel Brazil.
Under the
terms of the Purchase Agreement, AMX will acquire the Acquired Equity Interests for an aggregate purchase price of $905 million on a debt free, cash free basis, subject to certain adjustments at closing, including reimbursement for capital
expenditures and working capital investments made from March 1, 2019 to closing. AI Brazil will receive its pro rata share of the net purchase price plus the preferred return contemplated in the Amended and Restated Articles of Association of
Nextel Holdings. AMX will place $30 million of the purchase price into an
18-month
escrow account to secure NIIs indemnification obligations under the Purchase Agreement.
In addition, in connection with the Nextel Brazil Transaction, NII and AI Brazil have entered into an agreement relating to the Nextel Brazil
Transaction that includes the resolution of a dispute regarding the investment of funds into Nextel Holdings from an escrow related to NIIs sale of its operations in Mexico (the Mexico Escrow), pursuant to which the parties have
agreed that AI Brazil will receive, after the closing of the Nextel Brazil Transaction, the first $10 million recovered from the Mexico Escrow followed by 6% of the value of additional funds recovered from the Mexico Escrow, in both cases, if
and when funds are released. NII has also agreed to indemnify AI Brazil for damages that may arise from certain tax contingencies, transaction expenses, transaction-related litigation and other matters in connection with its participation in the
Nextel Brazil Transaction.
The closing of the transactions contemplated by the Purchase Agreement are subject to the satisfaction of
customary conditions, including approval of the stockholders of NII, receipt of required regulatory and antitrust approvals, and either an amendment eliminating the obligations contemplated under, or an escrow agreement providing for a deposit in
accordance with, NIIs Indenture with respect to NIIs 4.25% Convertible Senior Notes due 2023.
The Purchase Agreement includes
certain termination rights for each party and provides that, in specified circumstances, NII is required to pay a termination fee of $25 million. In the event that the Purchase Agreement is terminated because NIIs stockholders fail to
approve the Nextel Brazil Transaction, NII is obligated to reimburse AMX for its documented
out-of-pocket
expenses incurred in connection with the Purchase Agreement and
the transactions contemplated thereby, up to $2 million.