Virgin Mobile Usa Announces Ipo Details

Virgin Mobile USA, a joint venture between Sprint Nextel and the UK's Virgin Group has formally filed for a stock market listing, which the company expects to raise around US$375 million. The floatation will reduce Sprint Nextel's stake in the company from 47% to 17.2% and Virgin Group will see its stake fall from 47% to 35.6%. A total of 42.8% of the company will be in free float after the IPO.

The company plans to sell around 25.6 million shares, while stockholders will sell an additional 1.95 million, according to a filing with the U.S. Securities and Exchange Commission. Virgin Mobile will not receive cash from the IPO, with the funds being used to repay debt and general purposes.

Virgin Mobile said it would use part of the proceeds of the IPO to repay US$150 million of debt and US$45 million that it owes to Sprint Nextel. The filing revealed that the company had reported a profit of US$26.5 million on revenues of US$667 for the first half of this year.

The floatation could raise a maximum of US$537 million, but the company calculated that its net proceeds would be about US$375 million after various expenses and if the shares sell in the middle of the expected range.

Posted to the site on 25th September 2007