HOUSTON, April 3, 2013 /PRNewswire/ -- Crest
Financial Limited, the largest minority shareholder of Clearwire
Corporation (NASDAQ: CLWR), today proposed to provide Clearwire
$240 million in financing through a
convertible debt facility. The arrangement, described in a letter
to Clearwire's board, is superior to the financing provided by
Sprint Nextel Corporation and designed to free Clearwire to explore
alternatives to Sprint's inadequate merger offer, Crest said. The
Crest proposal is similarly structured as the Sprint financing with
Clearwire but is more favorable to Clearwire and its minority
shareholders.
According to Clearwire's public disclosures, the proposed
$240 million of financing would
provide Clearwire with enough capital to build-out 2,000 LTE sites
as planned and to pay its interest expenses in 2013. In
addition with the $160 million that
Clearwire has already received under the Sprint financing and cash
on hand, Clearwire would have sufficient funds to build at least
2,133 sites above its 2,000 LTE site build-out plan. The
proposed Crest financing would also provide Clearwire's board with
more time to consider alternatives to the proposed merger with
Sprint. Among other alternatives, the Crest financing would
allow Clearwire to continue as an independent company and execute
its multi-customer business plan that the Clearwire board's own
financial advisors, Evercore Group and Centerview Partners,
concluded is the most profitable business strategy Clearwire could
pursue. In addition, it would give the Clearwire board the
opportunity to pursue sales of excess spectrum, such as to DISH
Network Corporation, to provide more liquidity to Clearwire.
Crest believes that DISH made a real and actionable proposal to
purchase a portion of Clearwire's excess spectrum some time ago
but, for reasons known only to Clearwire, Clearwire has failed to
complete such sale.
Under Crest's proposal, Crest would provide $240 million of debt financing to Clearwire
through a note purchase agreement. The Crest notes would be issued
at 1% interest rate per annum (the same as the Sprint Notes) and
with the same maturity date as the Sprint notes. The Crest notes
would be exchangeable at $2.00 per
share, a significant premium of 33.3% above the $1.50 per share Sprint notes' exchange price.
Crest's proposal is not contingent on financing; Crest and its
affiliates have sufficient funds available to fund the $240 million in full.
In addition to the higher exchange price of $2.00 a share, the Crest notes have several
advantages to the Sprint notes. First, the Crest notes remain
available even if Clearwire's stockholders reject the - merger with
Sprint. Second, if Clearwire were to draw on the Crest notes
after the stockholders reject the merger with Sprint, the Crest
notes would not become exchangeable until the maturity date in
June 2018; by contrast, the Sprint
notes are likely to become exchangeable in October 2013 (or sooner). Consequently, the
Crest financing offers greater value to Clearwire stockholders by
providing Clearwire with very inexpensive debt for a longer term
and possibly avoiding substantial near-term dilution.
In a statement, David Schumacher,
the General Counsel of Crest Financial Limited, said: "
Today, Crest has proposed to the Clearwire's board an alternative:
the liquidity it needs to continue the build-out of its TDD-LTE
wireless network, to explore sales of excess spectrum to DISH or
others to provide Clearwire with more liquidity, and to pursue a
multi-customer strategy that ensures the highest value for its
assets while at the same time avoiding additional draws on the
coercive Sprint financing. To Crest, the benefits of
our proposal to Clearwire and its stockholders are clear. The
Sprint notes are intended to leave Clearwire's minority
stockholders with the unfair choice of acquiescing to Sprint's
inadequate merger offer or suffering significant dilution at the
hands of Sprint. Our proposal is aimed at breathing new life into
Clearwire by providing the liquidity and time that Clearwire needs
to pursue the profitable multi-customer plan that will bring
significantly more value to Clearwire's stockholders than the
Sprint offer."
Crest's proposed debt financing to Clearwire's board can be
found at http://www.bancroftpllc.com/crest/.
About Crest Financial Limited
Crest Financial Limited
is a limited partnership under the laws of the State of
Texas. Its principal business is investing in securities.
Important Legal Information
CREST FINANCIAL LIMITED
AND OTHER PERSONS MAY BE DEEMED TO BE PARTICIPANTS (THE
"PARTICIPANTS") IN A SOLICITATION OF PROXIES IN RESPECT OF THE
PROPOSED MERGER OF CLEARWIRE WITH SPRINT NEXTEL CORPORATION.
THE PARTICIPANTS INTEND TO FILE A PROXY STATEMENT WITH THE
SECURITIES AND EXCHANGE COMMISSION. ALL INVESTORS AND
SECURITYHOLDERS OF CLEARWIRE ARE URGED TO READ THE PROXY STATEMENT
AND ALL OTHER PROXY MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION. INFORMATION
REGARDING THE PARTICIPANTS AND A DESCRIPTION OF THEIR DIRECT AND
INDIRECT INTERESTS, BY SECURITY HOLDINGS OR OTHERWISE, WILL BE
CONTAINED IN SUCH PROXY STATEMENT AND OTHER PROXY MATERIALS.
UPON REQUEST, THE PARTICIPANTS WILL PROVIDE COPIES OF THE PROXY
STATEMENT AT NO CHARGE WHEN IT BECOMES AVAILABLE. THE PROXY
STATEMENT AND ALL OTHER PROXY MATERIALS WILL ALSO BE AVAILABLE AT
NO CHARGE ON THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT
HTTP://WWW.SEC.GOV.
Forward-looking Statements
Certain statements
contained herein are forward-looking statements including, but not
limited to, statements that are predications of or indicate future
events, trends, plans or objectives. Undue reliance should not
be placed on such statements because, by their nature, they are
subject to known and unknown risks and
uncertainties. Forward-looking statements are not guarantees
of future activities and are subject to many risks and
uncertainties. Due to such risks and uncertainties, actual
events may differ materially from those reflected or contemplated
in such forward-looking statements. Forward-looking statements
can be identified by the use of the future tense or other
forward-looking words such as "believe," "expect," "anticipate,"
"intend," "plan," "should," "may," "will," believes," "continue,"
"strategy," "position" or the negative of those terms or other
variations of them or by comparable terminology.
SOURCE Crest Financial Limited