Virgin Mobile terminates TRA in connection with acquisition by Sprint

Parallaxes Capital Management, the premier investment firm focused exclusively on monetizing Tax Receivable Agreements, is pleased to share a notable development in the market as Virgin Mobile USA, Inc. previously terminated its TRA.

Virgin Mobile disclosed that the Company, Sprint Nextel Corporation and Corvina Holdings Limited and Cortaire Limited (together with certain affiliates, the “Virgin Group”) entered into a termination and mutual release agreement in connection with Sprint Nextel’s acquisition of Virgin Mobile, to effect a mutual release of the respective obligations of each party under the Tax Receivable Agreement, dated as of October 16, 2007, by and between the Company, Sprint Ventures, Inc. and the Virgin Group. Pursuant to the terms of the termination, Sprint Nextel will contribute to the Company, and the Company will pay to the Virgin Group, approximately $50 million to terminate the TRA. The Virgin Mobile TRA provided for the payment of 100% of the net cash tax savings realized from certain tax attributes, including savings from the utilization of Virgin Group’s net operating losses attributable to periods prior to the IPO.

CT Bureau