NII Holdings, Inc. (NASDAQ:NIHD) announced recently that it has attained the final approval from the China Export and Credit Insurance Corporation for the pending amendment of credit facilities that Nextel Brazil accomplished with China Development Bank (CDB) in October last year. In addition, the amended CDB credit facilities and the Banco do Brasil S.A (BdB) and Caixa Econômica Federal amendments are also effective and up-to-date.
The stipulated Amendments offer better financing terms of reference to Nextel Brazil, which, include:
- Deferral of $386 million initial payments for the first 48 months from the date of effectiveness thus giving more cash to fund Nextel Brazil’s operations in the country;
- Extended loan maturity period of up to 98 months from the date of effectiveness;
- Holiday for specified financial agreement compliance including the net debt of up to June 30, 2020.
The Nextel Brazil is also granted additional security services to each of the CDB, BdB and Caixa organizations in a form of preferential rights to any amounts held in the bank accounts. Furthermore, Nextel Brazil will obtain a monthly minimum cash and receivable requirements. As a result, some of the NII’s subsidiaries would make equity contributions of the available cash on hand to the company over the next 48 months.
According to Dan Freiman, NII’s Chief Financial Officer, the Amendments to its three loans with the CDB, BdB, and Caixa will provide the company with a possible long-term capital structure, as it works on reducing the pressure on its liquidity. The company had about $420 million of liquidity as at September 30, 2017, and it’s currently in a better position to continue investing in the expansion of its 3G/4G business across Brazil while cutting down on unnecessary expenditure.
The company is working hard to gain momentum especially during this year and currently, the company is determined to recover about $47 million of cash collateral to secure its performance bonds. The signing of the amendments is a significant milestone for the company as it strives to enhance its financial outlook and liquidity to serve its customers better.