NEXTWAVE SEEKS COURT APPROVAL FOR PARTNERSHIP TO BUY SPECTRUM
NextWave sought approval from a bankruptcy court Fri. for a $150 million partnership agreement with investment firm Clarity Partners to work on new spectrum acquisitions. The proposed acquisition venture, called IPCom, which Clarity would form and fund, came amid continued speculation that NextWave was nearing a deal to sell Cingular Wireless 20% of its PCS licenses for nearly $1.4 billion. Clarity is a Beverly Hills-based private equity firm that focuses on media and telecom investments and has holdings in Oxygen, PrimeCo and MetroPCS.
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In a filing in U.S. Bankruptcy Court, White Plains, N.Y., NextWave said it planned to craft an acquisition strategy with Clarity by July 31 if the 2 companies mutually decided to buy certain spectrum (on which NextWave didn’t elaborate) that would be “suitable for the deployment of a broadband wireless service.” The filing said NextWave had been “actively evaluating spectrum opportunities to complement its PCS licenses to facilitate its plans to deploy a nationwide broadband service.”
Without naming a possible buyer, NextWave also told the court it was evaluating possible sale of some of its licenses, which could reduce its spectrum footprint. It said its broadband wireless data business plans encompassed “service in major markets across the country.” It said the relationship with Clarity, and the possible acquisition of additional spectrum, would let it roll out “broadband wireless services as contemplated by its business plans.” The proposed pact filed with the court would provide for Clarity to pay a maximum of $250,000 in fees and expenses related to due diligence for spectrum acquisition and the formation of IPCom.
NextWave told the court it had been working to update its business plan and had been looking at multiple options at the same time, including “restructuring as a going concern, utilizing all or some of their PCS licenses, as well as opportunities designed to optimize the usage and disposition” of its spectrum assets. The company said its alternatives included selling, leasing or swapping some licenses and “possibly supplementing their licenses with the acquisition of complementary spectrum.” NextWave told the court Clarity had participated in the U.K.’s 3G wireless auctions and had “evaluated wireless broadband in Europe and Asia.” It requested a June 18 hearing on its motion for approval of the Clarity partnership.
Talks involving a potential sale to Cingular of NextWave licenses aren’t expected to include NextWave’s valuable N.Y.C. assets. The deal, if it comes together, apparently would allow NextWave to keep a national wireless footprint by offering 10 MHz of its 30 MHz C-block licenses in certain markets. The FCC returned NextWave’s licenses to the bankrupt carrier after the D.C. Appeals Court, D.C., in June 2001 reversed the Commission’s decision to cancel those PCS licenses for nonpayment. A Jan. 2001 re-auction of the NextWave spectrum, ultimately overturned by the D.C. Circuit, generated $16 billion. NextWave originally had bid $4.7 billion for the licenses and some analysts suggested earlier this year that the spectrum could be worth close to $6.5 billion.