América Móvil Completes $950m Nextel Brazil Acquisition

América Móvil completes $950m Nextel Brazil acquisition

20 December 2019 | Jason McGee-Abe

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NII Holdings (NIIH) has completed the sale of its shares in Nextel Brazil to Mexico's América Móvil for $948.5 million.

The deal saw AI Brazil sell all of its interests in Nextel Holdings to NII Brazil Holdings (NIIBH), and NIIH sold all of the issued and outstanding shares of NIIBH to América Móvil, resulting in América Móvil acquiring direct ownership of NIIBH and indirect ownership of all of the issued and outstanding shares of Nextel Brazil.

"We are pleased to announce the successful completion of the sale of Nextel Brazil," said Dan Freiman, NII's chief financial officer.

"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."

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 NIIH sold all of the issued and outstanding shares of NIIBH to América Móvil, resulting in América within 45 days of the closing of the transaction.

The deal was in accordance with the terms of the purchase agreement, dated 18 March 2019, by and among América Móvil, NII International Holdings, AI Brazil Holdings and NII, as amended from time to time.

In connection to the deal, NII and Al Brazil had previously 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.

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 and its net proceeds were $166.3 million.

The company expects the total amount of cash available to be distributed to stockholders in the future will be between $227 million ($2.17 per share) and $280 million ($2.68 per share). This range of distributable values is primarily driven by the ultimate recovery of amounts currently held in escrow accounts. As of 17 December, NII had $25.4 million of cash and $103.4 million of cash held in escrow.

Separately, NII will offer to repurchase any and all outstanding 4.25% convertible senior notes due 2023 at a repurchase price equal to 100% of the principal amount plus accrued and unpaid interest.