WARREN, N.J., Aug. 22 /PRNewswire-FirstCall/ -- Virgin Mobile USA, Inc.
(NYSE: VM), a leading national provider of pay-as-you-go wireless services,
today announced that it has completed its acquisition of Helio, a joint
venture between SK Telecom and EarthLink, Inc. (Nasdaq: ELNK) that
complements Virgin Mobile USA's strengths through its specialization in
highly advanced postpaid products and services. The acquisition was
completed based on the terms and conditions outlined in Virgin Mobile USA's
June 27, 2008 press release. All necessary regulatory approvals have been
obtained.
(Logo: http://www.newscom.com/cgi-bin/prnh/20070613/VIRGINMOBILE )
In connection with the acquisition, Helio shareholders SK Telecom and
EarthLink and have received limited partnership units and shares equivalent
to 13 million shares of Virgin Mobile USA Class A common stock, with a
value of $38 million based on the average closing price of Virgin Mobile
USA's Class A shares, as of two trading days before and two trading days
after the date of announcement. In addition, SK Telecom and Virgin Group
will each invest $25 million in Virgin Mobile USA for preferred shares.
Dan Schulman, Chief Executive Officer, Virgin Mobile USA, emphasized
the benefits of the transaction to Virgin Mobile USA and the new
opportunities for growth it creates. "Adding Helio's differentiated
postpaid offer to Virgin Mobile USA's existing portfolio will expand both
our market opportunity and our ability to deliver new products and services
more rapidly," he said. "We believe this transformative transaction will
bolster our leading position in the wireless space, and enable us to
provide customers with whatever they need in wireless, always with our
focus on great value, flexibility and customer service. We look forward to
revealing our roadmap for expanded, innovative offers in the near future.
"This acquisition of Helio also comes with a number of financial
benefits, including improved network rates from Sprint for Virgin Mobile
USA, and strategic investments by SK Telecom and Virgin Group which improve
our capital structure and increase liquidity," Schulman said.
Schulman said that the transaction provides Virgin Mobile USA with:
-- a set of unique and differentiated data applications;
-- entry into the postpaid market, with a sophisticated billing and
customer care platform;
-- approximately 170,000 Helio customers;
-- revised terms for the Sprint PCS Services Agreement [NYSE: S],
expected to result in an 8% reduction in the Company's effective cost per
minute in 2009;
-- reduction in net debt of approximately $35 - $40 million, through
the investments of $25 million each by SK Telecom and Virgin Group in the
form of preferred mandatory convertible stock at the price of $8.50 per
share;
-- an increase to Virgin Mobile USA's total revolver from $75 million
to $135 million, through additional commitments of $25 million by Virgin
Group and $35 million by SK Telecom; and
-- the addition of SK Telecom as a strategic shareholder with two seats
on the Company's Board of Directors.
A percentage of the equity issued and issuable in the transaction will
be subject to escrow for one year to secure certain indemnification
obligations. Additional information is available at
http://investorrelations.virginmobileusa.com/.
About Virgin Mobile USA
Virgin Mobile USA, Inc. [NYSE: VM], through its operating company
Virgin Mobile USA, L.P., offers more than five million customers control,
flexibility and choice through monthly Plans Without Annual Contracts, with
national coverage powered by the Sprint PCS network. With its pay-as-you-go
plans and the addition of Helio's postpaid offerings, Virgin Mobile USA now
provides consumers with the broadest range of wireless alternatives. Virgin
Mobile USA's full slate of smart, stylish and affordable handsets are
available at approximately 40,000 top retailers nationwide and online at
http://www.virginmobileusa.com/, with Top-Up cards available at more than
140,000 locations. Virgin Mobile USA is known for its award-winning
customer service, and its customers report a 90% satisfaction rate. Virgin
Mobile USA allows customers to earn free minutes in exchange for viewing
advertising content online through the innovative Sugar Mama program, and
contributes a portion of profits from downloadable content to The
RE*Generation, its pro-social initiative to help homeless youth.
About Helio
Helio, LLC, now part of Virgin Mobile USA, has built a reputation as
the mobile brand for the Internet generation with advanced mobile services,
exclusive high-end, connection devices like the Ocean, and integrated
pricing on a nationwide high-speed 3G network. Helio was launched in 2006
as a joint venture between EarthLink and SK Telecom, one of the world's
most advanced wireless carriers and now an investor in Virgin Mobile USA.
For more information, visit http://www.helio.com.
About SK Telecom
SK Telecom (NYSE: SKM, KSE: 017670) is the top wireless communication
provider in Korea, where it has more than 22 million subscribers taking up
more than 50% of the total market. The company established in 1984, reached
KRW 11.28 trillion in revenue in 2007. SK telecom was the first to launch
and commercialize CDMA, CDMA 2001x, CDMA EV-DO and HSDPA networks, and it
currently provides cellular, wireless internet, mobile media, global
roaming service and more. For more information, please visit
http://www.sktelecom.com or email to press@sktelecom.com.
Safe Harbor Statement
This press release contains certain forward-looking statements and
information relating to us that are based on the beliefs of our management
as well as assumptions made by, and information currently available to, us.
These statements include, but are not limited to, statements about our
strategies, plans, objectives, expectations, intentions, expenditures, and
assumptions and other statements contained in this document that are not
historical facts. When used in this press release, words such as
"anticipate," "believe," "estimate," "expect," "intend," "plan," "project"
and similar expressions, as they relate to us are intended to identify
forward-looking statements. These statements reflect our current views with
respect to future events, are not guarantees of future performance, and
involve risks and uncertainties that are difficult to predict. Further,
certain forward-looking statements are based upon assumptions as to future
events that may not prove to be accurate.
Many factors could cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements that may be expressed or implied by such
forward-looking statements. The potential risks and uncertainties that
could cause actual results to differ from the results predicted include,
among others, those risks and uncertainties discussed in our filings with
the Securities and Exchange Commission, copies of which are available on
our investor relations website at
http://investorrelations.virginmobileusa.com and on the SEC website at
http://www.sec.gov. In addition, factors that could cause actual results to
differ from those projected include, but are not limited to, the following:
(1) the occurrence of any event, change or other circumstances that could
give rise to the termination of the transaction agreement, (2) the
inability to complete the transactions due to the failure to satisfy
conditions to the completion of the transactions, including the expiration
of the waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, if applicable, and the failure to receive other required
regulatory approvals, including approvals from the Federal Communications
Commission, (3) risks that the proposed transactions disrupt current plans
and operations and the potential difficulties in employee retention as a
result of the transactions, (4) the ability to recognize the results of the
transactions, (5) the amount of the costs, fees, expenses and charges
related to the transactions, and (6) risks that Helio or any other
companies we may acquire could have undiscovered liabilities, may strain
our management capabilities or may be difficult to integrate.
We neither intend nor assume any obligation to update these forward-
looking statements, which speak only as of their dates.
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SOURCE Virgin Mobile USA, Inc.
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Related links:
http://www.virginmobileusa.com
http://www.helio.com http://www.sktelecom.com
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/20070613/VIRGINMOBILE
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Media, Jayne Wallace, +1-908-607-4014,
jayne.wallace@virginmobileusa.com, or Investors, Erica Bolton,
+1-908-607-4108, erica.bolton@virginmobileusa.com, both of Virgin
Mobile USA
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