NEW YORK (AFP) — Virgin Mobile USA, a joint telecom venture between US firm Sprint Nextel and Virgin Group of Britain, said Tuesday it plans to raise about 400 million dollars in its market debut.
In a statement filed with the Securities and Exchange Commission, the US market regulator, the mobile phone operator said it was putting up for sale 25.6 million shares, representing 55 percent of the firm's total, at a price between 15 and 17 dollars per share.
The initial public offering (IPO) would generate around 375.6 million dollars, based on an IPO share price of 16 dollars, the company said.
In addition, the firm said, a group of minority shareholders, including consumer electronics retailer Best Buy, plans to sell 1.9 million of its shares.
Virgin Mobile USA offers prepaid, or pay-as-you-go, wireless communications services targeted at the youth market, using Sprint Nextel's network for a fee.
The firm, which was launched nationally in the United States in July 2002, said it served 4.8 million customers as of June 30. For the first six months of 2007, Virgin Mobile USA reported net profit of 26.5 million dollars on revenue of 666.9 million.
In 2006 the company was still in the red, with revenue of 1.1 billion dollars and a net loss of 36.7 million dollars. The earnings, however, marked an improvement over the two prior year's losses.
Virgin Mobile USA said the IPO proceeds mainly will be used to pay off debt and buy from Sprint Nextel about a 16.7 percent stake.
On June 30 the company had a debt of 522 million dollars, which it estimated would be reduced to 332 million dollars after the market listing.
Virgin Mobile USA currently is controlled by Virgin and Sprint Nextel, with each owning about 47 percent in the company.
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