NII announces reorganisation plan to emerge from bankruptcy

25 Nov 2014

US-based NII Holdings has announced that, following negotiations, it has reached an agreement with its major stakeholders, including its two largest creditors, on the material terms of a reorganisation plan to be implemented in the firm’s Chapter 11 cases pending in the US Bankruptcy Court. ‘After months of hard work, we are pleased to announce an agreement on the key terms of a reorganisation plan that provides a path for the company to emerge from bankruptcy in a healthy financial position to effectively compete in the wireless marketplace,’ said Steve Shindler, NII Holdings’ CEO, adding: ‘This deal is an important step in the process and allows us to move forward and present our reorganisation plan to the court for its approval.’ NII, the parent company of Nextel-branded wireless operators in Brazil, Mexico and Argentina, filed for relief under Chapter 11 of the Bankruptcy Code in a New York court in September. Earlier this month the company said its consolidated net loss from continuing operations widened to USD456.8 million in 3Q14 from USD259.5 million twelve months earlier, while third-quarter 2014 revenues dropped 15% year-on-year to USD926.7 million.

NII said the reorganisation plan will strengthen its balance sheet by converting USD4.35 billion of unsecured notes into equity interests in the reorganised company, as well as enhance the firm’s liquidity by providing USD500 million of new capital through a fully backstopped USD250 million rights offering of the reorganised company’s stock that will be made available on a pro rata basis to holders of NII’s senior notes and an additional USD250 million of exit financing in the form of debt. The plan will also implement a global settlement of all claims related to ‘certain complex inter-company and inter-creditor disputes’.