Wifi Revolution

San Diego, Calif.-based NextWave Wireless Inc announced Sunday that it had kicked off the process of discontinuing the operations of its GO Networks (News - Alert), a supplier of wide-area Wi-Fi network equipment, as part of a global restructuring program.

 

The wireless broadband technology solutions provider said it had filed a request in Israel to seek bankruptcy protection for its subsidiary based in the Jewish city of Tel Aviv.

 

Nextwave announced Sept. 17 it was selling its infrastructure business units, formerly known as IP Wireless (News - Alert) and Go Networks, and other assets as part of a global restructuring.

 

NextWave says the initiation of a bankruptcy process for GO Networks Ltd. will not affect the businesses of its other subsidiaries. In reality, Nextwave has been hurt by a global delay in the adoption of next-generation telecom equipment.

 

Go Networks is believed to be tightening its cash flow and disallowing the company to focus attention on other successful businesses.

 

NextWave is a big player in the wireless telecommunication industry. From device-embedded mobile multimedia software to digital home products, NextWave is a major supplier for the world’s handset makers and its solutions can be found in more than 250 million devices.

 

For the quarter ended June 30, Nextwave reported a net loss of $91.8 million on revenue of $31.8 million. That compared to a net loss of $72 million on revenue of $12.8 million for the like quarter in 2007.

 

The company also said it received a commitment for $100 million in new financing through the issuance of second lien notes. As part of this transaction, Avenue Capital Management and Sola, the two financing entities, will receive warrants to purchase 40 million shares of Nextwave’s common stock.

 

In the meantime, NextWave has been exempted by NASDAQ from seeking approval from (NASDAQ’s) shareholders, which is necessary for the company to issue notes and warrants associated with the $100 million in new debt financing. The company anticipates the debt financing transaction to close on or about Oct. 6.

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