Item 1.01. Entry into a Material Definitive Agreement.
On December 18, 2019, in connection with the Transaction (as defined in Item
2.01 below), NII Holdings, Inc. ("NII") entered into a First Supplemental
Indenture (the "Supplemental Indenture"), to the Indenture, dated August 14,
2018, between NII and Wilmington Trust, National Association, as trustee (the
"Indenture"), that governs its 4.25% Convertible Senior Notes due 2023 (the
"Notes"). Pursuant to the Supplemental Indenture, NII irrevocably elected cash
settlement as the settlement method for any conversion of the Notes.
In addition, NII entered into an Escrow Agreement with Wilmington Trust,
National Association, as escrow agent and as trustee (the "Notes Escrow
Agreement"), whereby NII agreed to fund an escrow account in the amount of
$134.8 million from the net proceeds of the Transaction pursuant to Section
11.04 of the Indenture in order to satisfy NII's obligations under the Notes and
the Indenture. As more fully described in Item 2.01 below and incorporated
herein by reference, NII also entered into the Transaction Escrow Agreement.
The foregoing descriptions of the Supplemental Indenture, the Notes Escrow
Agreement and the Transaction Escrow Agreement are not complete and are
qualified in their entirety by reference to the full text thereof, which are
filed herewith as Exhibits 4.1, 10.1 and 10.2, respectively, and are
incorporated herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On December 18, 2019, NII completed the previously announced sale of its
wireless operations in Brazil ("Nextel Brazil" and such sale, the "Transaction")
in accordance with the terms of the Purchase Agreement, dated March 18, 2019, by
and among América Móvil, S.A.B. de C.V. ("AMX"), NII International Holdings S.à
r.l. ("NIIH"), AI Brazil Holdings B.V. ("AI Brazil") and NII (the "Purchase
Agreement"), as amended from time to time.
At the closing of the Transaction, AI Brazil sold all of its interests in Nextel
Holdings S.à r.l. ("Nextel Holdings") to NII Brazil Holdings S.à r.l. ("NIIBH"),
and NIIH sold all of the issued and outstanding shares of NIIBH to AMX,
resulting in AMX acquiring direct ownership of NIIBH and indirect ownership of
all of the issued and outstanding shares of Nextel Brazil. The aggregate
purchase price was $948.5 million, after making adjustments pursuant to the
Purchase Agreement to add a $30.3 million reimbursement of capital expenditures
and a $16.9 million working capital adjustment and to deduct a $3.7 million
selling and marketing spending shortfall compared to budget. After deducting
$491.6 million of net debt, the net purchase price at closing was $456.9
million. The purchase price is subject to review and adjustment by AMX within 45
days of the closing of the Transaction.
In consideration for the sale of its 27.55% ownership interest in Nextel Brazil,
AI Brazil received a $2.5 million preferred return and its $125.2 million pro
rata share of the net purchase price. After deducting these amounts, NII's share
of the net purchase price was $329.2 million.
Pursuant to the terms of the Purchase Agreement, $30.0 million of the net
proceeds due to NII was placed into an 18-month escrow account to secure NII's
indemnification obligations under the Purchase Agreement with AMX, with
Citibank, N.A. as escrow agent (the "Transaction Escrow Agreement"). After
taking into account the amounts placed into escrow pursuant to the Transaction
Escrow Agreement and the Indenture Escrow Agreement described above and
accounting for a $1.9 million upward adjustment for a decrease in estimated
accrued tax contingencies pursuant to the Purchase Agreement, the net proceeds
to NII were $166.3 million.
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule
or Standard; Transfer of Listing.
On December 18, 2019, in connection with NII's plan to dissolve following the
closing of the Transaction, NII notified the Nasdaq Stock Market of its intent
to delist its common stock, par value $0.001 (the "Common Stock") from the
Nasdaq Global Select Market. NII expects to file a Form 25 with the Securities
and Exchange Commission and Nasdaq Stock Market relating to the delisting of the
Common Stock on December 30, 2019, with trading of its Common Stock suspended
before the market opens on January 2, 2020. NII does not expect that a trading
market will develop for its Common Stock following suspension of trading on
Nasdaq. NII expects that the official delisting of the Common Stock will be
effective January 9, 2020.
Item 8.01. Other Events.
On December 18, 2019, NII issued a press release announcing the completion of
the Transaction, and a separate press release announcing the planned delisting
of NII's common stock and planned dissolution of the company. A copy of these
press releases are attached as Exhibits 99.1 and 99.2, respectively.
Item 9.01. Financial Statements and Exhibits.
(b) Pro Forma Financial Information
Unaudited pro forma condensed consolidated financial statements of NII, which
reflect the sale of NII's interests in Nextel Brazil to AMX, are furnished as
Exhibit 99.3 to this Current Report on Form 8-K. The information contained in
these pro forma financial statements shall not be deemed "filed" for purposes of
Section 18 of the Exchange Act, or otherwise subject to liabilities of that
section, nor shall it be deemed incorporated by reference into any filing under
the Securities Act or the Exchange Act, unless specifically identified therein
as being incorporated therein by reference.
Exhibit No. Description
First Supplemental Indenture, dated as of December 18, 2019,
between NII Holdings, Inc. and Wilmington Trust, National
4.1 Association, as trustee.
Escrow Agreement, dated as of December 18, 2019, between NII
Holdings, Inc. and Wilmington Trust, National Association, as escrow
10.1 agent and trustee.
Escrow Agreement, dated as of December 18, 2019, between América
Móvil, S.A.B. de C.V., NII Holdings, Inc. and Citibank, N.A., as
10.2 escrow agent.
Press Release announcing the closing of the Transaction, dated
99.1 December 18, 2019.
Press Release announcing the planned delisting of the Common Stock
of NII Holdings, Inc. and planned dissolution of the company, dated
99.2 December 18, 2019.
Unaudited Pro Forma Condensed Consolidated Financial Statements of
99.3 NII Holdings, Inc.
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