Virgin Mobile USA announced that it has completed its acquisition of Helio,
a joint venture between SK Telecom and EarthLink,) The company believes that the acquisition complements Virgin
Mobile USA's strengths.
Dan Schulman, Chief Executive Officer, Virgin Mobile USA,
emphasized the benefits of the transaction providing Virgin Mobile USA
with:
- a set of unique and differentiated data applications;
- entry into the postpaid market, with a sophisticated billing and customer
care platform;
- approximately 170,000 Helio customers;
- revised terms for the Sprint PCS
Services Agreement [NYSE: S], expected to
result in an 8% reduction in the Company's effective cost per minute in 2009;
- reduction in net debt of approximately $35 - $40 million, through the
investments of $25 million each by SK Telecom and Virgin Group in the form of
preferred mandatory convertible stock at the price of $8.50 per share;
- an increase to Virgin Mobile USA's
total revolver from $75 million to $135 million, through additional commitments
of $25 million by Virgin Group and $35 million by SK Telecom; and
- the addition of SK Telecom as a strategic shareholder with two seats on
the Company's Board of Directors.
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