Virgin Mobile seeks $375 million
Published September 26th, 2007
Virgin Mobile US is planning to raise $375 million (£186 million) in new funds from its upcoming float on Wall Street, it emerged in a regulatory filing last night.
The company is a joint venture between Sprint Nextel, the US telecoms giant, and the Virgin group. Both parties hold a 47 per cent share in the business, which they set up in November, 2003. As of March this year the mobile phone company had 4.88 million prepaid subscribers in the US, 15 per cent of the American market. The group moved into the black for the first time during the first quarter of the year. In the float the group will sell a stake worth almost 43 per cent.
In the latest filing to the SEC last night, the company said that it planned to sell about 27 million shares at between $15 and $17 each. After expenses, the company plans to use the $375 million to repay $150 million of debt and $45 million of borrowings that it owes to Sprint. If the float goes ahead at $16 a share, it would value the group at more than $900 million.
The flotation, widely expected to take place in the second week of October, is being underwritten by Mer-rill Lynch, Lehman Brothers and Bear Stearns, the US investment banks. The underwriters have the option to buy up to an additional 4.1 million shares to cover any overallotments.
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