CDMA Network Files for Bankruptcy Protection

The US CDMA network operator, Leap Wireless has filed for Chapter 11 bankruptcy protection while it tries to restructure its debts. While the company is reorganizing, daily operations at the Company will continue; Cricket stores will remain open; network service will not be interrupted; employees will be paid; and suppliers will be paid in the ordinary course of business for goods and services provided after the filing date. The Company does not expect any organizational changes or reduction in force as a result of this filing.

"Since announcing our restructuring discussions in August of last year, we have been working actively and constructively with our major creditor groups to develop a plan designed to provide a suitable long-term capital structure for our business," said Harvey P. White, Leap's chairman and CEO. "We expect Cricket and Leap to successfully restructure their debt and that Cricket will emerge from bankruptcy a stronger company continuing to offer the high quality of service that its customers expect. We currently have more than $100 million in cash and short term investments at Cricket and, based on our current performance and our projections for the future, we believe that our restructured company will have adequate cash to operate the business while continuing to offer our service to customers without interruption and providing good opportunities for our employees."

The company was divested from Qualcomm in 1998, and following a surge in subscriber growth has suffered recently from a sharp downturn in new subscribers and an increase in dealership fraud.

Cricket, the company's consumer brand currently operates a fragmented service in 40 markets in 20 states stretching from New York to California. The last subscriber numbers, dated last September gave the company just under 1.5 million customers and made it the USA's 9th largest operator by subscriber numbers."

Posted to the site on 15th April 2003