NII Holdings, Inc. (NASDAQ:NIHD) Tanks As AINMT Invests $50 Million

NII Holdings, Inc. (NASDAQ:NIHD)

NII Holdings, Inc. (NASDAQ:NIHD)

Shares of NII Holdings, Inc. (NASDAQ:NIHD) plunged 11.62% after the company announced completion of a $50 million investment in Nextel Brazil by AINMT. The two companies currently own stakes in the Brazilian mobile telecommunications company as part of a joint venture inked last month.

Wednesday’s sell-off puts more pressure on NII Holdings, Inc. (NASDAQ:NIHD) – which has risen by 66.67% after reporting quarterly earnings over a month ago. The stock continues to move in a downward trend in a tight $0.57 – $0.68 per share trading range.

NASDAQ:NIHD
Candle bar graph for Brazil Nextel $NIHD

NII Holdings, Inc. (NASDAQ:NIHD) is a Brazilian provider of wireless communication services under the Nextel brand. The company offers mobile voice services, wireless data services, text messaging, and mobile internet. The company also offers location-based services that include the use of global positioning system technologies and digital media a services.

NII Holdings-AINMT Joint Venture

NII Holdings, Inc. (NASDAQ:NIHD) has set its eyes on the Brazilian joint venture as it looks to reinvigorate its growth prospects in the wireless business. The partnership with AINMT seeks to provide needed liquidity for financing the ongoing restructuring.

AINMT, which is the parent company of Norway mobile network operator Ice, has an option to invest an additional $150 million in the joint venture by November 15, 2017. An investment of $150 million would take the company’s stakes in Nextel Holdings to 60%. NII Holdings, Inc. (NASDAQ:NIHD) remains confident of AINMT exercising the option ahead of the Q1 2018 deal closing.

Nextel Brazil Growth Prospects

Additional investments should provide Nextel Brazil with the financial power to develop a commercial strategy needed to expand the current subscriber base. The company would also benefit from AINMT’s significant experience in the telecom space while also gaining access to global technology.

Brazilian consumers are set to benefit a great deal from the combination of AINMT and NII Holdings, Inc. (NASDAQ:NIHD) offerings. A stronger Nextel Brazil should be able to provide more alternatives in the wireless space in addition to better services. The partnership may also result in state of the art data centric wireless networks as well as high-quality spectrum position with LTE capabilities.

“We welcome this investment, which will significantly strengthen our strategic and operational options and capabilities. It also enables a renewed focus on growing our 3G and LTE business by attracting and retaining customers who value the high-quality wireless services we offer,” said Roberto Rittes Nextel Brazil CEO.

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: Marc has a degree in economics and a MSc. in Finance. Marc worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Author: Marcus Anderson

Marc has a degree in economics and a MSc. in Finance. Marc worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

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