- The Washington Times - Friday, August 8, 2008

KANSAS CITY, Mo. | Late Thursday, Sprint Nextel Corp. canceled the proposed $3 billion convertible stock offering it had announced the day before.

The nation’s third-largest wireless carrier said Wednesday it planned to sell 3 million shares of preferred convertible stock and put the proceeds toward debt repayment and other uses.

But Sprint spokesman James Fisher said buyers of the shares were demanding higher rates than the company had anticipated, leading Sprint to ax the deal.

Mr. Fisher stressed that the company is “in solid financial shape,” has “plenty of liquidity” and still plans to pay off around $1 billion in debt during the third quarter. Sprint has about $19.5 billion in outstanding debt, net of cash and marketable securities.

News of the company’s decision leaked to the market late in the trading session Thursday, causing shares to jump as much as 16.5 percent before ending up 45 cents, or 6.1 percent, to $7.79.

Stifel Nicolaus analyst Christopher King said he wasn’t surprised Sprint had trouble finding buyers for the offering, given how the general economy is faring and Sprint’s own internal problems.

The company on Wednesday reported a $344 million second-quarter loss and the loss of another 901,000 subscribers. Sprint has fallen far behind market leaders Verizon Wireless and AT&T; Inc., as it has battled technical problems, unsuccessful marketing and difficulties consolidating following its 2005 purchase of Nextel Communications Inc.

“Three billion is a big number,” Mr. King said. “Combined with the fact Sprint is continuing the struggle and the current environment, it’s not great timing.”

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