Motorola Sells $325M of Nextel Stock
SCHAUMBURG, Ill. (AP) _ In a move to further boost its cash position, mobile phone maker Motorola Inc. said Tuesday it sold $325 million worth of Nextel Communications Inc. stock.
Schaumburg-based Motorola sold 25 million, or 23 percent, of its 108 million shares of wireless service provider Nextel, to a single investment bank.
Motorola said the block sale will result in a pretax gain of $250 million for its first quarter and $325 million in proceeds overall.
After the block sale, Motorola will own 83 million shares of Nextel, which would represent about a 9 percent stake.
Motorola said it is considering more actions in the first quarter to improve its position.
With positive operating cash flow in the last eight quarters, Motorola expects to continue that trend in 2003.
In addition, Motorola plans to hedge another 25 million Nextel shares over the next five years to several more banks. The forward sale transactions won’t be completed until February 2008. After the forward sales, Motorola would own no less than 6 percent of Reston, Va.-based Nextel.
Motorola shares traded Tuesday afternoon at $8.20, down 22 cents, or 2.6 percent, on the New York Stock Exchange. Shares of Nextel Communications were at $13.12, down 36 cents, or 2.7 percent, on the Nasdaq Stock Market.