Nextel Extends its Reach
February 7, 2000
Nextel Partners Inc., an affiliate of high yield benchmark issuer Nextel Communications, plans to raise between $352.5 million and $446 million via an initial public offering to help finance the expansion of digital wireless service.
Nextel Partners, which also has about $700 million in outstanding debt, will further allow Nextel Communications to extend its reach into the smaller markets.
Nextel Communications focuses on the larger markets, and like most of the big telecom players, it uses its relationship with an affiliate - Nextel Partners - to extend its reach into the smaller cities and rural areas.
The company plans to sell 23.5 million shares for $15 to $19 each, giving the size of the offering a range between $352 million and $446 million.
The smaller markets where Nextel Partners concentrates have about 10 million customers in total, and Nextel is hoping to increase that to about 20 million by the end of this year..
The capital being raised by Nextel Partners, as both debt and equity, will be used to buy switches, towers and antennas.
The larger company sold wireless licenses to its affiliate in January 1999 in exchange for cash and preferred stock. Nextel Communications owns nearly 37% of Nextel Partners before the current equity offering.