Clearwire boosts size of stock offering to $350M
Money-losing mobile broadband provider will use proceeds from the offering to upgrade its existing WiMax network to a newer technology called LTE.
Clearwire expects to raise $350 million in its stock offering next week, an increase over its previous plans to raise $300 million.
The money-losing mobile broadband provider and wholesaler plans to sell 175 million Class A shares at $2 in an offering expected to close on December 13, the company said in a statement today. Clearwire said it plans to use the proceeds from the offering to continue to operate and upgrade its existing WiMax network to a newer technology called LTE.
Sprint Nextel, the majority shareholder in Clearwire, will buy about 172 million shares of the company's Class B shares in a separate transaction. Last week,by committing up to $1.6 billion in financing.
The company plans to make the switch to LTE to better serve companies interested in reselling its wireless service. It hopes to boost its customer base beyond Sprint. It is poised to lose its cable customers after Comcast and Time Warner Cable signed deals with Verizon Wireless.
Clearwire hasto operate its current network and continue building its 4G network. Specifically, it needs about $150 million to $300 million to continue its operations, and another $600 million for the LTE upgrade. The company ended the third quarter of 2011 with $711 million in cash.