NII Holdings sells off Nextel Chile as bankruptcy looms

19 Aug 2014

NII Holdings has struck a deal to sell its Chilean subsidiary to a joint venture of US, Argentinian and UK companies, the Wall Street Journal writes, citing documents filed with the US Securities and Exchange Commission (SEC). US private equity firm Optimum Advisers, Argentinian media company Grupo Veintitres and UK-based investment house ISM Capital agreed to takeover Nextel Chile for an undisclosed sum. In a separate announcement, NII Holding announced that it had not been able to reach a deal with its bondholders regarding debt restructuring, adding that it might have to file for Chapter 11 bankruptcy. Reporting net losses of USD623.3 million for Q2 2014, NII chief executive Steve Shindler noted: ‘Despite the actions we’ve taken to improve our operational performance, we have fallen short in our efforts, leaving the company with a liquidity position that is not sufficient to support the business.’

According to TeleGeography’s GlobalComms Database, Nextel represented around 1.0% of the Chilean market at the end of March 2014. Having previously operated an iDEN network to serve the corporate segment, in 2009 the company took a step towards the mass market when it won a 3G concession. The new network was finally activated in May 2012, but the cellco has proved unable to make a dent in the sector, claiming just 128,611 3G subscribers at the end of 2013, representing around 2.0% of the 3G space. On a more positive note, the cellco has a high penetration of post-paid users, with more than 60% of its customers on monthly plans.

Chile, NII Holdings, WOM