WFI sells Mexico operations

Wireless Facilities Inc. (WFI) has announced that it has agreed to divest all of its operations in Mexico for about $18 million in cash to a newly-formed company created by the co-founder of WFI, who has not been involved in WFI for the last four years.The company also said it would delay its fourth quarter earnings call, originally set for today, until March 14, before which the deal is expected to close. The payment for the deal will occur in installment, WFI said. The buyer, Sakoki LLC, is controlled by Massih Tayebi, brother of current WFI chairman Masood Tayebi. Although Massih Tayebi has no current role with the WFI, he was CEO from inception in 1994 through September 2000, and was a director from inception through April 2002. He also controls about 10% of the total voting power of the company's capital stock, according to a statement from WFI. The statement also said that Masood Tayebi will not personally benefit or otherwise be involved with the ongoing operations of the assets WFI is selling. "The decision by the company to divest the Mexican operations was prompted by the changing business climate in Mexico and a review of the strategic alternatives for the company's free cash flow," the statement added. "Unfavorable contractual terms recently proposed by the Company's largest customers in Mexico would further increase the extensive working capital required to operate a Mexican deployment company while pricing pressure threatens to adversely affect the future profitability of the Mexican operations." WFI also plans to write off unrecoverable expenses estimated to be between $5 million and $6 million for the fourth quarter of 2005, because several of its largest customers in the region changed their cell site build-out plans and now require fewer cell site, the statement said.