Clearwire Corporation, the unprofitable wholesale wireless carrier, soared as much as 29 per cent after partner and main owner Sprint Nextel Corporation said it may use proceeds from a note offering to help finance the company.Clearwire gained 8.3 per cent to $1.90 at 12:58pm New York time, after rising as high as $2.25. Before Friday, the shares had lost 66 per cent this year on concern that the company will run out of money. Money from Sprint would allow Kirkland, Washington-based Clearwire to fund its operations and help pay for a planned network upgrade. Clearwire said this week that it has capital for 12 months and that its future may depend on Sprint, with which it is in talks for a new wholesale agreement. Sprint had previously signaled that it wouldnt provide Clearwire with financial backing. "The fact that funding Clearwire is mentioned as a possible use of proceeds suggests the companies are moving in the right direction," Jonathan Chaplin, an analyst at Credit Suisse in New York, said in a note to investors. He rates both Sprint and Clearwire shares "outperform." The debt sale is also a positive for Sprint because it shows that the company has access to capital markets, Chaplin said. Sprint, which didnt disclose the size of the note offering, said last week it plans to refinance $4bn of its debt and seek as much as $3bn in financing from suppliers. Sprint shares rose 2.5 per cent to $2.88. The company also had its credit rating cut further into junk by Standard & Poors because of costs related to a planned network upgrade. Sprint said proceeds from the sale of the seven- and 10- year notes will be used "for general corporate purposes, which may include, among other things, redemptions or service requirements of outstanding debt, network expansion and modernisation and potential funding of Clearwire," according to a company statement. Leigh Horner, a Sprint spokeswoman, declined to comment beyond the statement. Mike DiGioia, a Clearwire spokesman, declined to comment. Clearwire said this week that its priority is to reach a new network-sharing agreement with Sprint, adding that a failure to do so could jeopardise operations. Clearwire has also said it needs about $1bn for operations and to upgrade its network from the WiMax technology to long-term evolution, or LTE. "We really have one overarching goal which is to get the company to profitability," Clearwire Chief Executive Officer, Erik Prusch said last week in an interview, adding that, "We want to have a long-term WiMax commitment, a long-term LTE commitment, and funding. Weve got to get these things done as soon as we can." Sprint, which accounts for most of Clearwires revenue and customers, said last month it will stop selling WiMax devices after 2012.
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