NEW YORK-McCaw International Inc., Seattle, plans to exchange for publicly traded debt securities about $461.5 million in 10-year, 13 percent senior discount notes it sold privately in March.
The exchange, which doesn’t involve an investment bank, will convert the privately sold debt units into one note plus one warrant to buy shares of common stock. The exchange notes will be senior unsecured notes ranked equally for repayment purposes with all other unsubordinated unsecured debt, according to the company’s filing with the Securities and Exchange Commission.
McCaw, a wholly owned subsidiary of Nextel Communications Inc., McLean, Va., won’t receive any proceeds from the exchange sale.
McCaw is a specialized mobile radio operator with territory covering a population of 230 million people, including 120 million in Latin America. Taking advantage of Nextel’s experience and supplier relationships, McCaw is in the process of upgrading its SMR systems to enhanced specialized mobile radio systems for greater capacity and services offering capability.
By year-end, McCaw plans to launch ESMR service in the Philippines, followed by Brazil during the first quarter of 1998 and Argentina and Mexico later next year.
In January, Nextel paid $186.3 million to purchase an 81 percent equity interest in McCaw Brazil Ltd., the largest SMR operator in Brazil in terms of number of channels and subscribers.
The debt exchange planned is in connection with the creation of Brazil Holding Co., which McCaw and Nextel are forming in order to attract investment from Brazilian corporations to help finance the new ESMR system there. “The company is in discussions with several large Brazilian corporate groups about the possible sale of up to a 20 percent equity interest in Brazil Holding Co.,” the SEC registration document said.
