Boston, MA 03/10/2014 (wallstreetpr) – Today, NII Holdings Inc (NASDAQ:NIHD), the company which provides Nextel telecom services in Latin America, is reported to have retained the services of financial advisors like UBS to help it figure out strategic alternatives.
In Lookout For Strategic Options
The company reported today that it is on a lookout for potential strategic opportunities for the company as well as its business units. The strategic alternatives could comprise partnerships, alliances or mergers and sale of one or more than one of its units, however, it is not clear if the options are being looked in for the entire business.
In addition to this, the company has hired financial advisor Rothschild Inc. to assist it with the modification in capital structure in order to improve its long-term liquidity position. The company said in a statement that the potential approaches could be applied for refinancing all or a part of the existing debt obligations.
This decision comes on the heels of the recent poor display of the Reston, Virginia-based company in its fourth quarterly results. During the recent earnings session, the company admitted that it may not be able to meet its financial commitments in 2015 and onwards. While it noted that enough funding is available for the current year, but there is a need to evaluate alternative options to boost liquidity and “significantly” correct its operating performance so as to keep its business funding on track.
Analyst Downgrades Adds Up to Another Stumbling Block
While the company’s gloomy numbers have already cast shadows on its future course of direction, it also faced a setback from the analyst front. HSBC’s Richard Dineen slashed his price target to $40 for the company, while maintaining an underweight rating over the stock. He is skeptical if the company’s asset sales efforts will fetch any fruitful benefit to its shareholders. He noted that the company failed to achieve any success in its sale of Argentina and Chile units over the last one year. And, at the same time, he thinks that the spectrum sales in Mexico like markets could hit a regulatory roadblock.
HSBC’s rating adds up to consecutive third rating downgrade for the company post its fourth quarter results. Earlier S&P too had downgraded the credit rating of the company to ‘CCC’ mentioning that its debt holders will receive very little out of their investments in case of a default.
