NIHD NII Holdings Inc

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 NII’s 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 NII’s 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, NII’s Indenture with respect to NII’s 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 NII’s 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.

The Purchase Agreement contains customary representations, warranties and covenants made by NII, NIIH, AMX and AI Brazil. Among other things, NIIH has agreed to conduct NIIBH’s, and each of its subsidiaries’, business in the ordinary course, use reasonable best efforts to operate its business in accordance with its budget for the year 2019 and use commercially reasonable efforts to maintain and preserve its business organization and preserve certain business relations.

The description of the Purchase Agreement and the related agreement with AI Brazil contained in this Form 8-K is qualified in its entirety by reference to the complete text of the Purchase Agreement filed as Exhibit 10.1 to this report and incorporated herein by reference.

NII’s Board of Directors also has approved a plan to dissolve and wind up NII after the closing of the Nextel Brazil Transaction, which will be disclosed in further detail in NII’s proxy statement to be filed with the Securities and Exchange Commission in connection with the solicitation of stockholder approval of the Nextel Brazil Transaction and the plan of dissolution.