NII Holdings has announced the sale of a 49% stake in its Nextel Argentina operation to Grupo Clarin as part of a strategic alliance between the pair.
The deal, worth US$178 million, also gives Clarin the option to purchase the remaining 51% of the mobile operator. Clarin is required to pay $159 million of the sum upfront and the balance within 30 days.
The transaction requires the approval of regulatory authorities in Argentina. NII said it will continue to control and operate Nextel Argentina until it secures the necessary clearances.
"The transaction with Grupo Clarin creates a promising path for the future of Nextel Argentina and its employees to compete effectively in the mobile market in Argentina," said NII Holdings chief executive Steve Shindler, earlier this week.
NII Holdings, which emerged from bankruptcy protection in June, has been looking for a buyer for its Argentina mobile unit for some time.
Local Argentine businessmen Sergio Szpolski and Matías Garfunkel were linked with the company more than a year ago, and 2015 brought fresh reports that the firm would be sold to private equity buyers.
The sale of the company to media group Clarin leaves NII Holdings with just one mobile operation in Latin America, its Brazilian business.
"[The Clarin deal] is consistent with our strategy to concentrate our resources on our operations in Brazil and provides incremental capital to improve our liquidity to support our business there," Shindler said.
NII named former Oi chief executive Francisco Valim as the new CEO of Nextel Brazil in late August.
"We are confident that Francisco is the right person to lead Nextel Brazil as we strive to build our subscriber base and increase revenues while continuing to reduce our costs," Shindler said, at the time.
NII’s second quarter results showed sliding revenues and a hefty operating loss. Shindler admitted the numbers were disappointing and declined to share the firm’s outlook for the full year. However, there was a bright spot, as the telco reported a growing 3G customer base in Brazil.
Nextel is Brazil’s fifth largest mobile operator, but with 2.13 million customers and a market share of just 0.76% at the end of July, according to regulator Anatel, it is no match for its bigger rivals.
Oi, the smallest of the big four, had 50.05 million customers at the same date, while Telefonica-owned Vivo remains the biggest player in the market with a 29.21% share and 82.2 million customers.
