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Nextel Q4 loss widens on US$1.6 billion writedown

Nextel Communications Inc, the mobile-phone company controlled by Craig McCaw, had a wider fourth-quarter loss after a US$1.6 billion writedown on assets in an international unit that may seek bankruptcy protection.

The loss attributable to shareholders was US$1.8 billion, or US$2.25 a share, from US$61 million, or US$0.08 a share, in the year-earlier period, Nextel said in a filing with the Securities and Exchange Commission.

NII Holdings Inc, 95 percent owned by Nextel, is talking to creditors to restructure debt totaling US$2.7 billion and may file for Chapter 11 bankruptcy, the document said. NII, which has operations throughout Latin America, was buffeted as Argentina defaulted on US$95 billion in bonds and devalued its currency. Chief Executive Tim Donahue has to resolve non-US woes, boost domestic sales and cut debt, analysts said.

Funds devoted to NII "would be better used enhancing a domestic business on the verge of profitability that needs help because it has a lot of debt," said Frank Marsala, an analyst at Robertson Stephens, who rates the stock "strong buy." He made the comment before the SEC filing.

Nextel said last month its fourth-quarter US loss widened to US$127 million from US$42 million. Nextel delayed reporting full results until determining charges for the asset writedown and restructuring, then estimated at between US$1 billion and US$2 billion. NII is paring operations in Argentina, Brazil and Peru, and plans to "focus substantially all of its available funding" toward the Mexico unit.
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