Clearwire looking to raise $595 million to start LTE roll out

Clearwire has new plans for getting its feet back under it.

A week after raising investors' concerns that it would delay a major loan payment, and announcing that it had finally reached a new agreement with longtime partner Sprint, the WiMax supplier says it plans to sell $300 million of its Class A Common Stock in a public offering, and will offer the underwriters a 30-day option to purchase an additional $45 million of the same.

According to Bloomberg, Clearwire is hoping to raise $595 million through the deals.

Clearwire's Dec. 1 announcement with Sprint — which will allow Sprint to use its 4G network over the next four years in exchange for $1.6 billion, if a number of stipulations are met — included details about the possibility of an equity offering. In the event of one, and if Clearwire were to raise between $400 million and $700 million, the statement shared, Sprint would participate in the offering "on a pro rata basis up to $347 million," which would be consistent with its 49.6% voting interest in the company (CP: Clearwire and Sprint agreement worth potentially $1.6 billion).

"Sprint has agreed to exercise its pro rata preemptive rights with respect to the offering [and in a private transaction will buy] only shares of our Class B Common Stock and a corresponding number of Class B Common Interests in Clearwire's wholly-owned subsidiary, Clearwire Communications, LLC," Clearwire said in a Dec. 5 statement.

Clearwire added that it plans to use the proceeds for "general corporate and working capital purposes," which includes deploying mobile 4G LTE technology alongside its current 4G WiMax technology and upkeeping the network. Sprint has been open about plans to eventually transition from WiMax to LTE, which is widely expected to become the more predominant 4G technology. In August, Clearwire came clean with its plans to do the same (CP: As the 4G road forks, Clearwire chooses both paths), explaining, as Sprint has also suggested, that it will overlay LTE on its WiMax infrastructure.

The remaining question had been where it would get the cash to do this. With that perhaps settled, is this the time that Clearwire becomes a solid, steady house in order?

"They're up against outfits like Verizon, which has a lot more focus, coverage and capital. Even the smaller networks, T-Mobile and Sprint, are having a hard time keeping up," analyst Roger Kay, with Endpoint Technologies, told Connected Planet. "Given industry concentration, I'm not sure there's room for a fifth player with no distinctive competence."