Clearwire Raises $290M in Rights Offering
WiMax service provider Clearwire raised more than US$290 million in a rights offering that expired on Monday, building up its war chest as it continues to deploy a national 4G network.
Investors in the offering exercised rights to purchase about 39.7 million shares in the company for an aggregate price of approximately $290.8 million, Clearwire said. The rights offering, which commenced last December, could have raised as much as $361 million if it had been fully subscribed.
Clearwire, which is majority owned by Sprint Nextel, has turned up commercial WiMax service in 34 markets around the U.S., reaching about 51 million potential subscribers. Sprint, Comcast and other service providers resell the service in many areas. It plans to offer the service in all major U.S. markets, reaching 120 million people, by the end of this year. New York, Los Angeles and San Francisco are among the cities that still need to be activated this year. By that time, Verizon Wireless expects to be selling its own 4G service, using LTE (Long-Term Evolution) technology, in 25 to 30 markets.
Clearwire has estimated it will spend between $2.8 billion and $3.2 billion on the network by year's end but said it can have a sustainable business with a network of that size. Last month it reported a net loss of $439 million, with revenue of $107 million, for the first quarter of the year. But the company also said it added 283,000 subscribers in the quarter, more than in all of 2009.