América Móvil to buy Nextel Brazil for $905m

19 March 2019 | Natalie Bannerman

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NII Holdings has entered into an agreement to sell its 70% share of Nextel Brazil to América Móvil for $905 million.

The debt-free, cash-free sale is being done through one of NII’s Luxembourg-based subsidiaries and in addition to NII’s sale, Al Brazil Holdings will also sell its 30% share of Nextel to América Móvil, making it, the sole owner of Nextel Brazil once completed.

Under the terms of the agreement, América Móvil will acquire all of the equity interests in Nextel Brazil for a total of $905 million minus net debt, reimbursement for capital expenditures and working capital investments. After which NII will receive 70% of the final net amount after taking $2 million preferred share return due to Al Brazil.

"The announcement of this transaction marks the culmination of an extensive multi-year process to pursue a strategic path for Nextel Brazil. It provides our best opportunity to monetise our remaining operating assets in light of the competitive landscape in Brazil and long-term need to raise significant capital to fund business operations, debt service and capital expenditures necessary to remain competitive in the future," said Dan Freiman, NII's chief financial officer. "Management and our board of directors believe the transaction is in the best interest of NII's stockholders."

Following the transaction NII’s board of directors has approved a plan to dissolve NII with an approximate $1 to $1.50 per share for each shareholder thereafter.

In connection to the deal, NII and Al Brazil have agreed that if the transaction to sell Nextel Brazil goes ahead, Al Brazil will be entitled to $10 million plus 6% of the additional amounts taken from the Nextel Mexico deal.  

The news comes a month after Telefónica Centroamérica Inversiones, a subsidiary of Telefónica, sold its business units in Guatemala and El Salvador to América Móvil for €570 million. The agreement with Telefónica is for the entire share capital Telefónica Móviles Guatemala and 99.3% of Telefónica Móviles El Salvador.