Clearwire may skip next debt payment
updated 04:40 pm EST, Fri November 18, 2011
Clearwire considering skipping $237m debt payment
Clearwire is considering not making a payment towards its debt due in the next two weeks. It owes $237 million on December 1 and its cash and short-term investments as of September 30 added up to $698 million, so the company can afford it, the Wall Street Journal said. Making the payment would put a significant draw on those savings, and the company is weighing the pros and cons of making it.
"It would be a significant drain of our cash, so we have to evaluate everything in terms of our decision of where we're going," said Chief Executive Erik Prusch. "We have a number of advisers advising us on all of our strategic options."
If it fails to make the payment, the company could face bankruptcy. The company does have a 30-day grace period after December 1 to make the payment, however. Leaving some money on hand would perhaps allow the company to make some investments towards building out its network to compete with the likes of AT&T and Verizon.
Sprint owns a majority of Clearwire.
