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Entries in Sprint Nextel (2)

Monday
Oct152012

Japan's Softbank Reaches $20.1B Deal to Buy 70% of Sprint

David Paul Morris/Bloomberg via Getty Images(OVERLAND PARK, Kan.) -- Sprint Nextel Corp. announced on Monday it has reached a $20.1 billion deal with Softbank that will give the Japanese wireless provider a 70 percent stake in the company.

The deal consists of $12.1 billion being distributed to Sprint stockholders and $8 billion of new capital "to strengthen Sprint’s balance sheet," Sprint said in a statement.

"SoftBank’s cash contribution, deep expertise in the deployment of next-generation wireless networks and track record of success in taking share in mature markets from larger telecommunications competitors are expected to create a stronger, more competitive New Sprint that will deliver significant benefits to U.S. consumers," Sprint said.

The deal will give Sprint, the number three U.S. wireless provider, a much needed financial boost and put it in a position to compete with larger rivals Verizon and AT&T.  It will also allow the company to pay down billions of dollars in debt and expand its next generation wireless network.

"This is a transformative transaction for Sprint that creates immediate value for our stockholders, while providing an opportunity to participate in the future growth of a stronger, better capitalized Sprint going forward.  Our management team is excited to work with SoftBank to learn from their successful deployment of LTE in Japan as we build out our advanced LTE network, improve the customer experience and continue the turnaround of our operations,” Sprint CEO Dan Hesse said.

The deal has been approved by the Boards of Directors from both companies but is still "subject to Sprint stockholder approval, customary regulatory approvals and the satisfaction or waiver of other closing conditions" before it is completed, Sprint said.  Both companies expect the transaction to be closed sometime in mid-2013.

Copyright 2012 ABC News Radio

Thursday
Apr192012

Sprint Nextel Accused of Dodging $100 Million Taxes

David Paul Morris/Bloomberg via Getty Images(NEW YORK) -- Sprint Nextel Corp. is accused of under-collecting and under-paying over $100 million in New York state and local sales taxes on flat-rate access charges for wireless calling plans.

New York Attorney General Eric Schneiderman announced on Thursday a lawsuit against Sprint Nextel requiring the company to pay three times its underpayment plus penalties if found liable to New York state and local governments, including school districts.

"Everyone else had no trouble figuring out what the tax law was, except for Sprint," Schneiderman said during a conference call.

Schneiderman said Sprint's major wireless competitors, including Verizon, AT&T, T-Mobile, and MetroPCS, have followed the law regarding the taxes and called the suit a "first-of-its-kind lawsuit."

The lawsuit is the first ever tax enforcement action filed under the New York False Claims Act in which those found liable under the False Claims Act must pay triple damages, penalties and attorneys' fees. Under the law, whistleblowers may receive up to 25 percent of any money recovered by the government as a result of information they provide.

"This complaint is without merit and Sprint categorically denies the complaint's allegations," said John Taylor, Sprint Nextel spokesman. "We have collected and paid over to New York every penny of sales taxes on mobile wireless services that we believe our customers owe under New York state law. With this lawsuit, the Attorney General's office is claiming New York consumers, who already pay some of the highest wireless taxes in the country, should pay even more. We intend to stand up for New York consumers' rights and fight this suit."

Twenty-nine states and the federal government have passed False Claims Acts, but only New York's Act expressly covers tax fraud as a result of a "landmark law," the Attorney General's office said.

"This case represents a new era in tax fraud prosecutions," Schneiderman said. "We're sending a message to corporations that failure to pay your fair share of taxes will not be tolerated."

In 2011, Schneiderman created the "Taxpayer Protection Bureau," as one of his first acts in office. The bureau is charged to work with whistleblowers and enforce the False Claims Act in tax and other government fraud cases.

Schneiderman's investigation of Sprint began with a whistleblower lawsuit, called a "qui tam" action, filed in New York State Supreme Court in Manhattan in March 2011, just after the Taxpayer Protection Bureau was created.

Working with the New York State Department of Taxation & Finance, the bureau conducted an investigation.

Schneiderman's office said that by filing Thursday's complaint, the Attorney General has taken over the action from the whistleblower on behalf of New York's taxpayers.

Copyright 2012 ABC News Radio







ABC News Radio