RESTON, Va., March 18, 2019 /PRNewswire/ -- NII Holdings,
Inc. ("NII") [NASDAQ: NIHD] today announced that it has agreed to
sell its 70% interest in its operations in Brazil ("Nextel Brazil") to América Móvil
S.A.B. de C.V. ("América Móvil") through the sale of one of NII's
Luxembourg-based subsidiaries. The
sale represents the disposition of NII's sole remaining operating
asset. Additionally, in connection with the transaction, AI Brazil
Holdings BV ("AI Brazil") has agreed to sell its 30% interest in
Nextel Brazil so that América Móvil will be the sole owner of
Nextel Brazil following the transaction. NII also announced today
in a separate press release its results for the fourth quarter and
full year 2018.
Under the terms of the purchase agreement, which has been
unanimously approved by NII's Board of Directors, América Móvil
will acquire all of the equity interests in Nextel Brazil for an
aggregate purchase price of $905
million less net debt and subject to certain adjustments at
closing, including reimbursement for capital expenditures and
working capital investments from March 1,
2019 to closing. NII will receive 70% of the final net
proceeds after deducting a $2 million
preferred share return due to AI Brazil. América Móvil will place
$30 million of NII's portion of the
net proceeds into an 18-month escrow account to secure NII's
indemnification obligations under the purchase agreement.
"The announcement of this transaction marks the culmination of
an extensive multi-year process to pursue a strategic path for
Nextel Brazil and provides our best opportunity to monetize our
remaining operating assets in light of the competitive landscape in
Brazil and long-term need to raise
significant capital to fund business operations, debt service and
capital expenditures necessary to remain competitive in the
future," stated Dan Freiman, NII's
Chief Financial Officer. "Management and our Board of Directors
believe the transaction is in the best interest of NII's
stockholders."
The purchase agreement includes certain termination rights for
each party and provides that, in specified circumstances, NII may
be required to pay a termination fee of $25
million to América Móvil.
The closing of the transaction is 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,
the indenture to NII's $115 million
principal amount of 4.25% Convertible Senior Notes due
2023.
NII's Board of Directors has also approved and will submit to
stockholders for approval a plan to dissolve and wind up NII after
the closing of the transaction. NII's preliminary estimate of the
amounts that will initially be available for distribution to NII
stockholders relating to the transaction with América Móvil as part
of NII's dissolution and wind up process is $1.00 to $1.50 per
share, depending on a number of variables, including the foreign
currency exchange rate in effect at the closing of the transaction
with América Móvil. NII anticipates that it will subsequently be
able to distribute additional amounts to NII stockholders depending
on the amounts recovered from the Nextel Mexico escrow and Nextel
Brazil escrow and from unrestricted cash that may be available at
the completion of the dissolution and wind up process.
In connection with the transaction, NII and AI Brazil have
agreed that if the transaction to sell Nextel Brazil is
consummated, AI Brazil will be entitled to the first $10 million and 6% of additional amounts
recovered from the Nextel Mexico escrow, as a resolution to an
outstanding disagreement regarding the characterization of any
contributions to Nextel Brazil from future proceeds released from
the Nextel Mexico escrow account.
NII was advised by Jones
Day. Rothschild & Co. and Greenhill & Co.
acted as NII's financial advisors.
About NII Holdings, Inc.
NII Holdings, Inc., a publicly held company based in
Reston, Virginia, is a provider of
mobile communication services for individual consumers who use our
services to meet both professional and personal needs in
Brazil. NII Holdings, operating
under the Nextel brand, offers fully integrated wireless
communication tools with digital cellular voice services, data
services, international voice and data roaming services and other
value-added services. Visit NII Holdings' website at
www.nii.com.
Visit NII Holdings' news room for news and to access our
market's news center: nii.com/newsroom.
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 expected
completion, timing and effects of our proposed sale of Nextel
Brazil and potential distributions to our stockholders upon
liquidation and dissolution, as well as our business and
economic outlook, future performance, and 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, the proposed sale of Nextel Brazil; the effects and timing
of the proposed transaction; our existing and future costs,
expenses, claims and other liabilities, and the impact of these
matters on our liquidation and dissolution; our ability to fund the
business and meet its business plan; customer growth and retention;
pricing, network usage; operating costs; the timing of various
events; AI Brazil's minority ownership in Nextel Brazil; the
economic and regulatory environment and the foreign currency
exchange rates that will prevail in 2019. 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 satisfaction of the conditions to consummate the
sale of Nextel Brazil, including approval by our stockholders; the
occurrence of any event, change or other circumstance that could
give rise to the termination of the purchase agreement; the amount
of the costs, fees, expenses and charges related to the sale of
Nextel Brazil, or the impact of any adjustments to the purchase
price; changes in foreign currency exchange rates; the effect the
pending sale of Nextel Brazil on our management team, customer
relationships, operating results and business generally, including
the ability to retain key employees; the cost and outcome of any
legal proceedings that may be instituted against us and others
following the announcement of the sale of Nextel Brazil; the timing
and amount of cash and other assets available for distribution to
our stockholders upon our dissolution and winding up; the impact of
liquidity constraints, including the inability to access escrowed
funds when expected; the impact of more intense competitive
conditions and changes in economic conditions in Brazil; the performance of our network; our
ability to provide services that customers want or need; our
ability to execute on our business plan, and the additional
risks and uncertainties that are described in NII's Annual Report
on Form 10-K for the year ended December 31,
2018, as well as in other reports filed from time to time by
NII with the Securities and Exchange Commission. This press release
speaks only as of its date, and NII disclaims any duty to update
the information herein.
Additional Information and Where to Find It
This press release relates to the proposed transactions
involving NII, AI Brazil and América Móvil. NII will file with the
Securities and Exchange Commission ("SEC") a proxy statement in
connection with the contemplated transaction and dissolution. The
definitive proxy statement will be sent to NII's stockholders and
will contain important information about the contemplated
transaction and dissolution. 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
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 transactions. Information
about NII's directors and executive officers is set forth in its
proxy statement for its 2018 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 will
file with the SEC.
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SOURCE NII Holdings, Inc.