Time Warner Cable to Sell Clearwire Stake

09/17/2012| 03:35pm US/Eastern

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Time Warner Cable (>> Time Warner Cable Inc) is planning to sell its entire 7.8% stake in struggling mobile broadband provider Clearwire Corp. (>> Clearwire Corporation).

The cable company notified other major Clearwire investors--which have an option to buy part or all of the stake--of the move and disclosed its intention in a regulatory filing Friday. Clearwire, which is intertwined with network partner and largest shareholder Sprint Nextel Corp. (S), is overhauling its network and seeking partnerships or asset sales to raise cash.

For Time Warner Cable, the sale comes as cable operators, once interested in entering the wireless business, have changed course and are largely shedding their airwave licenses.

Time Warner Cable paid $550 million for the Clearwire stake in 2008, but its 46.4 million shares would be worth only about $73.3 million at current prices. Shares of Clearwire recently traded down 2.5% to $1.58.

UBS analyst John Hodulik said Time Warner had already written down its investment in Clearwire and would likely use the cash for share repurchases.

A Time Warner Cable spokesman declined to elaborate on the filing.

A Sprint spokesman said the company is "aware of the filing and Time Warner's intentions and has no additional comment." A Clearwire spokeswoman declined to comment.

Numerous investors have walked away from the cash-strapped Clearwire, which holds a major chunk of airwave licenses as prime assets and seeks to sell wholesale wireless services. The company is playing catch-up with major U.S. carriers in rolling out a fourth-generation network that runs on LTE technology, a transition from its original WiMax service.

Google Inc. (>> Google Inc) sold its entire 29.4 million share stake in Clearwire for a $433.5 million loss in March, ending a nearly four-year $500 million investment. Intel Corp. (>> Intel Corporation) wrote down the entire value of its 7.3% voting stake in Clearwire earlier this year.

The company said it had $1.2 billion at the end of the second quarter and, based on its needs, has enough cash for "at least" the next 12 months and is considering other options to raise cash.

In June, Sprint said it is no longer the majority owner of Clearwire after the latter's issuance of stock to raise money diluted Sprint's holding. Sprint remains Clearwire's largest shareholder and controls seven of the 13 seats on Clearwire's board.

Write to Thomas Gryta at thomas.gryta@dowjones.com

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