Leap faces delisting

Leap Wireless International said it received notice from Nasdaq that the carrier faces delisting on Oct. 11.

An arbitration court ruling forced Leap to issue 21 million shares last month to MCG PCS, priced at $1.894, amounting to about $41 million, as an adjustment price for two New York PCS licenses Leap purchased from the company. Because Leap didn’t have time to obtain shareholder approval, it violated Nasdaq’s net tangible assets and stockholders’ equity requirements for listing.

Leap said in a press release that it intends to request a hearing with a Nasdaq.

Leap has also defaulted on its vendor loans. Last month, the carrier retained UBS Warburg to find new sources of financing and restructuring of debt. However, some lenders under Leap’s credit facilities have stopped funding new loan requests, including loan proceeds for interest that had previously been paid under these facilities. Leap has decided not to pay the interest on these loans.