From the NII Holdings Plan Support Agreement released today:
"Existing NII Equity Interests shall be extinguished, cancelled and discharged as of the Effective Date, and holders of Existing NII Equity Interests shall receive no distribution in respect of their equity interests."
This is the end of the road for the equity:
On September 16, 2014, NII Holdings, Inc. (the “Company”) received a notice (the “Notice”) from the staff (the “Staff”) of The NASDAQ Stock Market LLC (“NASDAQ”) indicating that the Staff intends to delist the Company’s securities from The NASDAQ Stock Market. The Notice was issued in accordance with NASDAQ Listing Rules 5101, 5110(b) and IM-5101-1 and states that the Staff’s determination is based on the Company’s announcement that it had filed for protection under chapter 11 of the U.S. Bankruptcy Code and the associated public interest concerns raised by the filing, concerns regarding the residual equity interest of the existing listed securities holders, and concerns about the Company’s ability to sustain compliance with all requirements for continued listing on The NASDAQ Stock Market, including in particular Listing Rule 5450(a)(1), which requires a minimum bid price of $1 per share.
The Notice states that, unless the Company requests an appeal of the determination, trading of the Company’s common stock will be suspended at the opening of business on September 25, 2014 and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will remove the Company’s securities from listing and registration on The NASDAQ Stock Market. The Company currently anticipates that any plan of reorganization implemented in the bankruptcy proceeding would provide that holders of claims and interests with respect to its equity securities, or rights to acquire its equity securities, would be entitled to no recovery and that those claims and interests would be canceled for no consideration. If that were to occur, all of the value of investments in the Company’s common stock will be lost. For this reason, the Company does not intend to take any further action to appeal the Staff’s decision.
"NII said at the time that it would continue negotiating a restructuring with the bondholders up until the deadline, which was this week. Last week, NII announced those discussions hadn't produced an agreement on restructuring. The company has two main groups of creditors, one led by Aurelius Capital Management LP."
Press release from NIHD bondholder Aurelius
We have taken the lead among bondholders in supporting a plan that would allow the Company to emerge from Chapter 11 swiftly, by deferring until after emergence the resolution (through litigation or settlement) of many inter-creditor disputes. Aurelius was ready last week to enter into a binding agreement to support a plan (the “Reserve Plan”) that would have:
Converted all $4.35 billion of NII bonds into 100% of the reorganized company’s equity (before taking into account the rights offering mentioned below and any management incentive plan).
Allocated that equity among the bondholders in accordance with the absolute-priority rule.
Raised fresh equity through a rights offering. Aurelius offered to backstop $125 million of that rights offering.
Deferred all inter-creditor disputes until after NII emerges from Chapter 11. A portion of the new equity would be placed in reserve and released as each dispute is resolved, whether through litigation or settlement. (Any settlements reached before emergence would be taken into account in the initial distribution of shares at emergence.)
"The case is NII Holdings Inc., 14-12611, U.S. Bankruptcy Court, Southern District of New York (Manhattan)."
Aurelius Capital Management LP doubled its stake in some NII Holdings Inc. bonds to more than $500 million, seeking to gain a leading position among creditors as the mobile-phone carrier heads toward a possible bankruptcy, according to a person with knowledge of the matter. The distressed-debt investor that’s been labeled a 'vulture' by the government of Argentina bought more of NII's $500 milion of 8.875 percent bonds due 2019 and $800 million of 10 percent securities due 2016...
Aurelius and Capital Group Cos. plan to hold talks next week to decide how to split ownership of NII, paving the way for a possible pre-arranged bankruptcy plan, according to the person.
WSJ:
NII Holdings Inc. has an agreement to sell its Chilean subsidiary, according to financial disclosures, but negotiations continue with bondholders as the Latin American wireless provider attempts to restructure its debt load.Wonder what this sold for?
Grupo Veintitrés, an Argentine media company; Optimum Advisors, a U.S. private-equity firm; and ISM Capital, a London-based investment firm that focuses on emerging markets, have formed a joint venture to acquire the stock of Nextel Chile S.A., NII said Monday in documents filed with the U.S. Securities and Exchange Commission.
NII didn't include a price in the financial disclosure and didn't respond to a request for comment Monday...
According to NII's recent financial statement, Nextel Chile posted $24.5 million in losses on $16.7 million in revenue during the quarter ended June 30. During the same period in 2013, the subsidiary lost $39.9 million on $14.6 million in revenue. NII was unable to precisely value this asset in its most recent financial disclosure.
"NII Holdings, Inc. announced today that is has elected not to pay approximately $118.8 million in interest due on August 15, 2014 on senior notes issued by its subsidiaries NII Capital Corp. and NII International Telecom, S.C.A. Under the terms of the indentures for the senior notes, there is a 30-day grace period during which the Company may elect to make the interest payments and cure any potential non-payment claims. As previously disclosed, the Company continues to engage in discussions with holders of, and representatives of certain holders of, the senior notes issued by NII Capital Corp. and NII International Telecom regarding the potential terms on which the obligations evidenced by those senior notes could be restructured, including by exchanging all or a portion of the senior notes for equity interests in, or debt securities of, the reorganized Company. Currently the Company has not entered into any agreements relating to a potential restructuring of its obligations, and there can be no assurance that these efforts will result in any such agreement. Additional information regarding the processes for implementing any agreed or other restructuring either on a standalone basis or in conjunction with one or more other potential actions and the potential timing of those processes is included in the Company's Form 10-Q for the quarter ended on June 30, 2014 filed with the Securities and Exchange Commission on August 11, 2014."
"'The company is not likely to pay the Aug. 15 coupon and will continue its negotiations with bondholders the following month,' Stan Manoukian, the Agoura Hills, California-based founder of Independent Credit Research LLC, said in a telephone interview. 'They will likely file when they strike a deal with current creditors.'"Gotta love the 30 day grace period.
"NII Holdings, Inc. today announced its consolidated financial results for the second quarter of 2014. The Company reported a net loss of 77,000 subscribers for the quarter, bringing its quarter-end subscriber base to 9.4 million, a 6 percent decrease from a year ago. Financial results for the second quarter include consolidated operating revenues of $969 million, a 23 percent [yoy] decrease compared to the second quarter of 2013; consolidated adjusted OIBDA loss, which excludes the impact of non-cash asset impairments, restructuring charges and other unusual items, of $137 million; and a consolidated operating loss of $504 million. For the second quarter of 2014, the Company generated a net loss from continuing operations of $629 million, or $3.65 per basic share. Capital expenditures were $123 million for the quarter.
While we have seen progress on some operational metrics, our financial performance continues to reflect the impact of the deterioration in our revenue base," said Juan Figuereo, NII Holdings' executive vice president and chief financial officer. "We have put plans in place to stabilize our revenues and improve our profitability, and we are taking more aggressive actions to reduce our costs and balance our investments in growth against the increasing pressure on our liquidity. We also continue to work with our advisors to identify and evaluate potential strategic transactions and have engaged in a series of productive discussions with holders of various series of our senior notes regarding a potential consensual restructuring of our balance sheet.
As a result of the Company's financial performance in combination with the potential impact of its inability to satisfy certain financial covenants under our existing debt obligations, the Company will likely find it necessary to file a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in order to implement a restructuring of its obligations on a stand-alone basis or in conjunction with one or more potential strategic transactions as disclosed in greater detail in the Company's Quarterly Report on Form 10-Q for the second quarter that was filed with the Securities and Exchange Commission."
NIHD news:
"Mobile service provider NII Holdings Inc , which operates under the Nextel brand in Latin America, said it may have to file for bankruptcy after reporting its ninth quarterly loss in a row. '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,' Chief Executive Steve Shindler said in a statement. NII, which in March hired financial firms to advise on a potential sale of the company, said it will not be able to continue to operate unless it can 'restructure debt obligations, find a strategic solution or some combination of those approaches.' The company ended the second quarter with a net debt of $4.8 billion. NII's quarterly loss widened to $623.3 million, or $3.62 per share, from $396.4 million, or $2.30 per share, a year earlier. The company lost 77,000 subscribers in the quarter ended June 30. Operating revenue fell 23 percent to $968.8 million."
The NIHD 10% "capco" bonds traded at a new low of 25.99, new high ytm of 105%. Current yield is 38%!
There's a 5 cent coupon due on Aug 15. That's a $40 million dollar check for the company to write. Will they or won't they?
Walter Energy - before market open on Thursday, July 31, 2014
Radio Shack - est Aug 1?
Molycorp - August 6
Dendreon - August 4 - August 8
NII Holdings - est Aug 11 - Aug 15
"The Admiral" writes in,
"NIHD's user base across Argentina, Brazil and Mexico has decreased 4.6% from 9.62 million as of 3/31/13 to 9.18 million as of 3/31/14. By contrast, the combined user base of NIHD's (publicly-traded) competitors for the same period in the same regions has increased 3.5% from 409.29 million to 423.41 million."
The NIHD 10% "capco" bond traded at a 99% yield to maturity today. They are @27 and have a 5 cent coupon on 8/15 - maybe not going to make it?
Here is a list of mobile network operators in the Americas - need to look at competitor reports to see if they are saying anything about taking market share from Nextel in their countries.
Argentina
- Claro, owned by America Movil (AMX)
- Movistar, owned by Telefonica (TEF)
- Personal, owned by Telecom Argentina (TEO)
- NEXTEL (NIHD) is number 4, about 3% market share
Brazil
- Vivo - Telefonica
- TIM - Telecom Italia
- Claro - America Movil
- Oi - Oi joint venture, Oi is (OIBR) on NYSE
- Algar, Grupo Algar
- Nextel (NIHD), has way less than 1% share
Mexico
- Telcel - America Movil
- Movistar - Telefonica
- Iusacell - Grupo Salinas
- Unefon - Grupo Salinas
- Nextel (NIHD) - has about 3% market share
Radio Shack bonds ended the week at 35 yielding 36% to maturity.
NIHD bonds ended at 33 yielding 80% to maturity.
Under 33 cents, yielding 77 percent.
From the earnings call:
Walter Piecyk - BTIGThe earnings release and call seemed to be a negative catalyst for the bonds and stock prices.
Can you comment today whether you are actually going to be making those June 30 payments, or are you just not commenting on that at this point?
Juan Figuereo - Chief Financial Officer
We are not commenting on that at this point.
First time writing about NIHD - they have annual interest expense 4.5x their market cap. Quarterly results:
"The Company reported a net loss of 52,000 subscribers for the quarter, bringing its quarter-end subscriber base to 9.4 million, a 4 percent decrease from a year ago. Financial results for the first quarter include consolidated operating revenues of $970 million, a 27 percent decrease compared to the first quarter of 2013; consolidated adjusted OIBDA loss, which excludes the impact of non-cash asset impairments, restructuring charges and other unusual items, of $84 million; and a consolidated operating loss of $239 million. For the first quarter 2014, the Company generated a net loss from continuing operations of $376 million, or $2.19 per basic share. Capital expenditures were $118 million for the period."
Posts
All Comments
