Today Earthlink (ELNK) confirmed that its Helio joint venture partner SK Telekom would be funding up to $270 million of additional investment. In the press release, Earthlink CEO Roll Huff also explained that this would allow Helio to move forward "without the need for further investment by Earthlink."
Up until now, both companies have had an equal share of Helio at 48% each. This was based on initial investments of $220 million each. The changes in ownership percentages following SK Telekom's additional investment have not been determined yet.
New CEO Rolla Huff has been taking steps to get Earthlink back on track. His first moves were to cut jobs and back away from Earthlink's municipal wifi projects. It was speculated that he may also try to sell their stake in money losing Helio.
Based on today's news it seems that Earthlink will retain their existing ownership in Helio, but stick SK Telekom with the burden of funding any additional investments necessary to keep Helio going.
Helio currently has 120,000 subscribers. They are expecting a full year 2007 net loss of between $330 and $360 million.
Friday, September 21, 2007
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