MVNOs have gotten some pretty bad press lately (not unreasonably, I might add), but it doesn’t seem to have held back Virgin Mobile USA which has upped its maximum offering price to $506 million. Back in May it had aimed for $100 million, so this means it thinks the market can take a higher percentage of the company. Virgin “plans to use its net proceeds, which are expected to be about $332.6 million after expenses, to repay some debt and to pay Sprint Nextel for limited liability company interests in Virgin Mobile USA LLC. The company will use the remaining proceeds for general corporate and other purposes” reports Forbes. The amended S-1 with tons of other details is here.
Some updated figures ending March 31:
–About 4.9 million customers.
–Earnings of $15.4 million in the first quarter, compared to $3.4 million a year earlier.
–Sales were $339.3 million in the first quarter, up from $280.2 million a year earlier.
–Total debt at March 31 was $531.3 million.
— Its average monthly churn for 2006 was approximately 4.81 percent.
Rafat adds: So this is unusual, at least: it will get about $332.6 million in proceeds after the IPO, which is fine, but will use almost all of it to repay debts, and very little (only $21.4 million) for its own general corporate purposes. It will repay a $150 million portion of the term loan outstanding, and pay approximately $161.2 million to Sprint Nextel for its stake. After the IPO, “Sprint Nextel and the Virgin Group together will continue to hold interests representing a majority of our outstanding voting power and will continue to control us.”
Comments have been disabled for this post