NII Holdings Completes Sale of Wireless Operations in Brazil
Thursday, December 19, 2019 | Comments

NII Holdings completed its previously announced sale of its wireless operations in Brazil, according to terms of the March agreement among América Móvil, NII International Holdings, AI Brazil Holdings and NII.

At the closing, AI Brazil sold all of its interests in Nextel Holdings to NII Brazil Holdings, and NIIH sold all of the issued and outstanding shares of NIIBH to AMX, resulting in AMX acquiring direct ownership of NIIBH and indirect ownership of all of the issued and outstanding shares of Nextel Brazil.

The aggregate purchase price was $948.5 million, after making adjustments pursuant to the purchase agreement to add a $30.3 million reimbursement of capital expenditures and a $16.9 million working capital adjustment and to deduct a $3.7 million selling and marketing spending shortfall compared to budget. After deducting $491.6 million of net debt, the net purchase price at closing was $456.9 million. The purchase price is subject to review and adjustment by AMX within 45 days of the closing of the transaction.

In consideration for the sale of its 27.55% ownership interest in Nextel Brazil, AI Brazil received a $2.5 million preferred return and its $125.2 million pro rata share of the net sale proceeds. After deducting these amounts, NII's share of the net sale proceeds was $329.2 million.

Under the agreement, $30 million of the net sale proceeds due to NII was placed into an 18-month escrow account to secure NII's indemnification obligations under the agreement with AMX and Citibank, as escrow agent. In addition, $134.8 million of the net sale proceeds due to NII was placed into a separate escrow to satisfy NII's obligations under its convertible notes and related indenture. After taking into account these amounts, and accounting for a $1.9 million upward adjustment for a decrease in estimated accrued tax contingencies pursuant to the purchase agreement, the net proceeds to NII were $166.3 million.

As of Dec. 17, NII had $25.4 million of cash and $103.4 million of cash held in escrow.

The company expects the total amount of cash available to be distributed to stockholders in the future will be between $227 million and $280 million. This range of distributable values is primarily driven by the ultimate recovery of amounts currently held in escrow accounts.

"We are pleased to announce the successful completion of the sale of Nextel Brazil," said Dan Freiman, NII's chief financial officer (CFO). "We would like to thank all of our employees for continuing to deliver great results this year and for their many years of service. With the sale of our last remaining operating asset behind us, we are preparing to begin the process to dissolve NII and distribute cash to stockholders later next year after we receive the required judicial approval."

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