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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 19, 2000
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NEXTEL INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
WASHINGTON 333-26649 91-1671412
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
10700 PARKRIDGE BOULEVARD, SUITE 600, RESTON, VIRGINIA 20191
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 390-5100
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
A. Proposed Offering
On July 19, 2000, we issued a news release announcing that we plan to issue
$500 million of Senior Notes due 2010 in a private placement as more fully
described in the news release, a copy of which is filed as Exhibit 99.1 hereto
and which information is incorporated herein by reference.
B. Other Recent Developments
International Roaming Services. We have developed, in conjunction with
Nextel Communications and Motorola, an international roaming service marketed as
Nextel Worldwide, which we commercially launched in our principal Latin American
markets and in the Philippines during the second quarter of 2000. This service
will enable our customers using the i2000, which is a dual mode subscriber unit
manufactured by Motorola, to roam worldwide with the convenience of one phone,
one number and one bill when traveling between our markets and other cities or
countries in which either Global System for Mobile Communications, or GSM, 900
MHz transmission technology or integrated digital enhanced network, or iDEN,
transmission technology, networks are operating and are covered by our roaming
agreements. We currently have over 50 roaming agreements in effect with GSM 900
MHz carriers worldwide and our parent's and affiliates' iDEN networks. Our
customers will have access to these networks after the testing and
implementation phases are completed.
Increase in Ownership Interest in NEXNET. Effective as of March 23, 2000,
as a consequence of capital contributions made to our Japanese affiliate,
NEXNET, by some of its shareholders to supply funds that a shareholder was
required but declined to contribute, the shareholder transferred a portion of
its shares to the contributing shareholders, including us. On March 30, 2000, we
purchased additional shares for about $0.4 million in cash and were granted an
option, exercisable at any time prior to March 31, 2001, to purchase any or all
of the remaining shares of NEXNET stock owned by the same shareholder. As a
result of these share acquisitions, our equity ownership interest in NEXNET has
increased from about 21% to about 32%. If we exercise the option, our equity
ownership interest would increase to about 44%.
Purchase of Minority Owner's Investment in Nextel Peru. In May 2000, we
purchased another shareholder's interest in Nextel del Peru, S.A., referred to
as Nextel Peru, for about $2.8 million in cash and increased our ownership from
about 63% to about 69%.
Purchase of Motorola International's Common Equity Shares in Companies in
Brazil, Peru and Chile. In May 2000, we purchased all of the equity interests of
Motorola International Development Corporation, referred to as Motorola
International, in Nextel Peru, which increased our ownership interest from about
69% to 100%. At the same time, we purchased all of Motorola International's
equity interests in Nextel S.A. (Brazil), referred to as Nextel S.A. and the
parent company of Nextel Telecomunicacoes Ltda., a wholly owned subsidiary of
Nextel S.A. and referred to as Nextel Brazil, which increased our ownership of
Nextel Brazil from about 88% to about 92%. We also purchased all of Motorola
International's equity interests in three Chilean analog specialized mobile
radio companies, which were wholly owned by Motorola International. We have
entered into an agreement with Motorola International to manage these three
companies during a transition period. The aggregate purchase price for these
acquisitions was about $77.6 million in cash.
Shanghai, Peoples Republic of China Negotiations. As a result of recent
changes to the regulatory environment in China, Shanghai CCT-McCaw
Telecommunications Systems Co., Ltd., a joint venture in which we own a 30%
interest, referred to as Shanghai CCT McCaw, terminated an agreement with China
United Telecommunications Corporation, referred to as Unicom, under which we had
the right to share in the profits of the cellular network in Shanghai, referred
to as the Shanghai GSM System. In consideration for entering into this
termination agreement, Shanghai CCT McCaw received about $61.3 million in cash
as well as warrants to purchase shares of Unicom stock. In May 2000, we received
a reimbursement of $7.5 million for advances we previously made to Shanghai CCT
McCaw. We are currently working with the other shareholders of the joint venture
to arrange reimbursement of expenses incurred by the shareholders related to
their investments in Shanghai CCT McCaw and the sale of our interests in the
joint venture. Any funds remaining after payment of these expenses and
satisfaction of other existing obligations will be distributed among the
shareholders of Shanghai CCT McCaw. We would be entitled to receive 30% of the
total amount so distributed based on our ownership interest.
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The table below provides an overview of our proportionate share of digital
subscriber units in service and total and proportionate population, or POPs, in
the regions where our operating subsidiaries and affiliates, or Operating
Companies, have licenses as of June 30, 2000, giving effect to the recent
acquisitions and the disposition described above:
<TABLE>
<CAPTION>
PROPORTIONATE
NEXTEL INTERNATIONAL DIGITAL
COUNTRY OWNERSHIP TOTAL POPS PROPORTIONATE POPS SUBSCRIBER UNITS
------- -------------------- ---------- ------------------ ----------------
(IN MILLIONS) (IN THOUSANDS)
<S> <C> <C> <C> <C>
Brazil............................ 92% 62 57 187
Mexico............................ 100% 50 50 133
Argentina......................... 100% 23 23 90
Peru.............................. 100% 7 7 42
Philippines....................... 38% 79 30 14
Canada............................ 14% 28 4 97
Japan............................. 32% 126 40 15
Chile............................. 100% 7 7 --
--- --- ---
Total............................. 382 218 578
=== === ===
</TABLE>
Additional Capital. On April 4, 2000, we received an advance of $77.6
million from a wholly owned subsidiary of Nextel Communications in connection
with the anticipated purchase of Motorola International's equity interest in
Nextel Brazil, Nextel Peru and three Chilean companies as discussed above. On
June 2, 2000, we issued 777 shares of our series A exchangeable redeemable
preferred stock to a wholly owned subsidiary of Nextel Communications as
repayment of this intercompany advance. Additionally, on April 7, 2000, we
issued 1,500 shares of our series A exchangeable redeemable preferred stock to a
wholly owned subsidiary of Nextel Communications in exchange for cash proceeds
of $150.0 million. On June 12, 2000, all of the outstanding series A
exchangeable redeemable preferred stock was exchanged for our common stock. On
June 29, 2000, we issued 2,150 shares of our series A exchangeable redeemable
preferred stock to a wholly owned subsidiary of Nextel Communications in
exchange for cash proceeds of $215.0 million.
Stock Split. On June 2, 2000, our board of directors approved an increase
in the number of authorized shares of common stock from 73,000,000 to
200,000,000, enabling us to complete a 4-for-1 stock split, which was effective
June 20, 2000.
Potential Acquisitions. We have entered into term sheets and/or are
negotiating agreements regarding potential investments in an aggregate amount of
about $175.0 million to increase our spectrum position or make strategic
acquisitions. However, we cannot assure you that definitive agreements will be
reached regarding any of these potential investments or as to their terms.
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FORWARD LOOKING STATEMENTS. "SAFE HARBOR" STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995: A number of the statements made in
this Current Report are not historical or current facts, but deal with potential
future circumstances and developments. They can be identified by the use of
forward-looking words such as "believes," "expects," "plans," "may," "will,"
"would," "could," "should" or "anticipates" or other comparable words, or by
discussions of strategy that involve risks and uncertainties. We warn you that
these forward-looking statements are only predictions, which are subject to
risks and uncertainties, including financial variations, changes in the
regulatory environment, industry growth and trend predictions. We have attempted
to identify, in context, some of the factors that we currently believe may cause
actual future experience and results to differ from our current expectations
regarding the relevant matter or subject area. The operation and results of our
wireless communications business also may be subject to the effect of other
risks and uncertainties in addition to the other qualifying factors identified
in this Current Report, including, but not limited to:
- general economic conditions in Latin America and Asia and in the market
segments that we are targeting for our services;
- the availability of adequate quantities of system network and subscriber
equipment and components to meet our service deployment and marketing
plans and customer demand;
- potential currency devaluations in countries in which our Operating
Companies conduct business;
- the accuracy of our estimates of the impact of foreign exchange
volatility in our markets as compared to the U.S. dollar;
- substantive terms of any international financial aid package that may be
made available to any country in which our Operating Companies conduct
business;
- future legislation or regulatory actions relating to our services, other
wireless communication services or telecommunications generally;
- the impact that economic conditions in Latin America and Asia, as well as
other market conditions may have on the volatility and availability of
equity and debt financing in domestic and international capital markets;
- the success of efforts to improve and satisfactorily address any issues
relating to our network performance;
- the continued successful performance of the technology being deployed in
our service areas;
- market acceptance of our new service offerings, including Nextel
Worldwide;
- the ability to achieve and maintain market penetration and average
subscriber revenue levels sufficient to provide financial viability to
our business;
- our ability to timely and successfully accomplish required scale-up of
our billing, collection, customer care and similar back-room operations
to keep pace with anticipated customer growth, increased system usage
rates and growth in levels of accounts receivables being generated by
our customer base;
- access to sufficient debt or equity capital to meet our operating and
financial needs;
- the quality and price of similar or comparable wireless communications
services offered or to be offered by our competitors, including providers
of cellular and PCS services; and
- other risks and uncertainties described from time to time in our reports
and registration statements filed with the Securities and Exchange
Commission.
"Nextel" and "Nextel Worldwide" are trademarks or service marks of Nextel
Communications, Inc. and "iDEN" and "i2000" are trademarks or service marks of
Motorola, Inc.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
NOT APPLICABLE
(b) PRO FORMA FINANCIAL INFORMATION.
NOT APPLICABLE
(c) EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No Exhibit Description
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<S> <C>
99.1 Press Release
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEXTEL INTERNATIONAL, INC.
Date: July 19, 2000 By: /s/ Thomas J. Sidman
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Thomas J. Sidman
Vice President
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No Exhibit Description
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<S> <C>
99.1 Press Release
</TABLE>
