NII Holdings Inc. terminated its investment agreement with AINMT Holdings AB and certain affiliates of NII and AINMT that was entered into on June 5, 2017.
The agreement was terminated because AINMT did not exercise its option to make a second investment by the option exercise date of Nov. 15, 2017, and because the second investment was not completed by the option termination date of Jan. 31, 2018. The termination of the investment agreement did not result in a penalty for the companies.
The investment agreement provided for the companies to partner in the ownership of NII's Brazilian operating subsidiary, Nextel Telecomunicações Ltda. through an initial investment by AINMT of $50 million for 30% ownership of Nextel Holdings Sàrl, which indirectly owns Nextel Brazil.
This initial investment was completed on July 20, 2017. The agreement also granted AINMT an option, exercisable on or before Nov. 15, 2017, to invest an additional $150 million in the company. If AINMT had exercised the option, its total $200 million investment would have resulted in a 60% controlling stake in the company.
The investment agreement provided for, after AINMT's initial investment, NII to contribute proceeds from the release of escrowed funds from the sale of its operations in Mexico to the company without the issuance of additional company shares to NII Holdings.
NII Holdings does not believe that this requirement survives the termination of the investment agreement and intends for all future contributions by NII Holdings to the company to be made through capital contributions with additional company shares being issued to NII Holdings. AINMT has notified NII that it believes future escrow proceeds received by NII from the escrow account must be contributed to the company through the 115 account without the issuance of shares.
Also, the company, NII and AINMT entered into a shareholders' agreement regarding, among other things, the ongoing governance of the company and the rights and obligations of NII and AINMT as shareholders of the company. The shareholders agreement remains in effect and NII intends to continue to meet all of its obligations in the shareholders agreement.
