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NII Holdings, Inc. (NASDAQ:NIHD) And Lenders Reach Agreement

NII Holdings, Inc. (NASDAQ:NIHD)

Shares of NII Holdings, Inc. (NASDAQ:NIHD) gained 4.55% after the mobile communication services provider announced the restructuring of a loan agreement with China Development Bank, Banco do Brazil, and Caixa Economica Federal. The changes include the deferral of principal payments for the first 48 months from the date of effectiveness.

NII Holdings, Inc. (NASDAQ:NIHD)

Loan Amendments

Wednesday’s rally helped push the stock slightly above its 52-week low of $0.36 a share. However, the stock continues to trade in a strong downtrend after underperforming the overall industry for the better part of the year. The stock is down by more than 80% for the year.

Amidst the underperformance, Chief Financial Officer, Dan Freiman remains upbeat about NII Holdings, Inc. (NASDAQ:NIHD) prospects,

“The signing of the amendments marks a significant milestone in our efforts to improve our financial outlook and liquidity and will enable us to continue to invest in and grow our business in Brazil. We are actively working to obtain the final approvals necessary for the amendments to become effective,” said Mr. Freiman.

The proposed amendments include a compliance holiday for certain financial covenants including the net debt financial covenant until June 30, 2020. The amendments also include a loan maturity date of 98 months. NII Holdings, Inc. (NASDAQ:NIHD), through Nextel Brazil, is to grant an additional security interest to each of its lenders in the form of preferential rights as part of the agreement. The amendments are still subject to approval by Sinosure on or before December 31, 2017.

 

Q2 Financial Results

NII Holdings, Inc. (NASDAQ:NIHD) reported a net loss of (-$84.8) million or (-$0.85) cents a share for the second quarter. Revenue in the quarter totaled $225 million. Capital expenditure in the quarter totaled $9 million. The company exited the quarter with a 29,000 3G net subscriber losses and 104,000 subscriber losses.

According to Chief Executive Officer, Roberto Rittes, the quarter highlighted improved operating cash flow efficiency due to increased focus on improving liquidity.

“In addition, during the quarter, other operators introduced more aggressive rate plans that affected our subscriber growth and churn. In response to this development, in August, we introduced new rate plans that we believe will compete well against the new offers in the market,” said Mr. Rittes.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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