Yes, indeed. Imagine if they had to pay $2.2 B - $2.5 B. Then Brazill is worth $2.5-$3b and Argentina another $500 MM or so. Suddenly it looks like common is worth something.
Also on Tuesday in Manhattan, NII Holdings Inc.NIHDQ -4.49% will ask a judge to approve procedures for an auction of Nextel Mexico, with a $1.88 billion lead bid by AT&T Inc.T -0.35%
If AT&T wins the auction, the company would possess a network that covers about 76 million people in the Mexican wireless market.
AT&T plans to integrate Nextel Mexico with Iusacell, which the telecom giant agreed to buy late last year in a deal valued at $2.5 billion at the time.
The deal for Nextel Mexico also includes all of NII Holdings ‘ wireless properties in the country, including network assets, retail stores, three million subscribers and spectrum licenses. The proposed $1.875 billion purchase price excludes an unspecified amount of outstanding debt.
AT&T said it expects the deal to close in the middle of the year, though it is subject the auction and approvals by Mexican regulators. Auction or not, the sale itself will also need to be approved by Judge Shelley C. Chapman, NII’s bankruptcy judge.
Where do you see that they are buying all of the assets? They bid $1.8 b just for Nextel Mexico.
Also, you can't assume the shares worthless even if they do bid on all. There is still an auction. They would be the stalking horse.
saw a few hit @ 8 cents already. Ask was .078 or .079
Argentina is an additional asset. Smaller but over 25% of Mexico based on covered population:
Population in licensed areas: 21 million
Covered population: 21 million
% GDP covered: 87%
"In 2012, Nextel Mexico ranked 284th among "500 Largest Companies in Latin America" by America Economia. "
Population in licensed areas: 113 million
Covered population: 74 million
% GDP covered: 82%
In 2012, Nextel Brazil ranked 162nd in the "500 Largest Companies in Latin America" list by America Economia.
Population in licensed areas: 189 million
Covered population: 87 million
% GDP covered: 67%
Seems like just based on this Brazil is worth even more.
"Under the deal, $4.35 billion of NII Holdings' unsecured notes would be converted into equity in the reorganized company, with some new capital added as well."
This is form the 11/24 release. Doesn't this mean they only need to surpass the $4.35 B value of the bonds?
almost 100% chance. Won't happen until plan is approved, which would be April at the earliest.
That's not the question you should be asking, however. The question you should ask is whether common will get a piece of the new equity.
Pursuant to the BCA, each of the Backstop Providers agreed, severally and not jointly, to purchase on the effective date of the Plan of Reorganization, at the Subscription Purchase Price (as defined in the BCA), a number of rights offering shares that are not subscribed for pursuant to the exercise of subscription rights equal to the amount of such Backstop Provider's backstop commitment. The number of rights offering shares to be purchased by each Backstop Provider will be determined in accordance with the BCA. To the extent that rights offering shares are not subscribed for in the rights offering, each Backstop Provider will deposit cash in the amount of the subscription purchase price for each BCA rights offering share such Backstop Provider purchases pursuant to the BCA. In consideration of the performance by the Backstop Providers of their backstop commitments, on the effective date and regardless of whether the Backstop Providers purchase any rights offering shares pursuant to the BCA, the Reorganized NII will pay an aggregate fee of 6% of the total rights offering amount to the Backstop Providers, other than any Backstop Provider that may have defaulted on its obligations under, or breached, the BCA, which fee will be payable in cash ratably to each Backstop Provider based on the proportion of the rights offering amount backstopped by such Backstop Provider.
The effectiveness of the BCA is subject to the approval of the Bankruptcy Court. There can be no assurance that the Bankruptcy Court will approve the BCA.
A copy of the filed BCA is filed herewith as Exhibit 10.1.
Item 1.01 Entry into a Definitive Material Agreement.
On December 30, 2014, NII Holdings, Inc. (“ NII ”), together with 12 of its U.S. and Luxembourg-domiciled direct and indirect subsidiaries (collectively, the “ NII Debtors ”) that are debtors and debtors-in-possession in chapter 11 cases (the “ Chapter 11 Cases ”) pending in the U.S. Bankruptcy Court for the Southern District of New York (the “ Bankruptcy Court ”), filed a motion with the Bankruptcy Court seeking approval of a Backstop Commitment Agreement (the “ BCA ”) they entered into with certain commitment parties thereto (the “ Backstop Parties ”) in connection with the rights offering pursuant to which the NII Debtors are seeking to raise approximately $250 million in connection with the Proposed Plan (as defined in Item 7.01 of this Report).
I believe shares get cancelled eventually, no matter what. Question is whether there is enough value here where existing shareholders get some of the new shares. In other bankruptcies where shareholders got something, the existing class of shares was almost always cancelled.
Doesn't mean they won't have value up until cancellation.