Globalstar Wins Two-week Reprieve from Creditors
PARIS — Mobile satellite services provideron April 1 announced it had won a two-week reprieve from holders of some $70.7 million in notes callable on April 1 and was working to secure a wider debt-restructuring agreement with the French export-credit agency, Coface, by the new deadline of April 15.
In a filing with the U.S. Securities and Exchange Commission, Covington, La.-based Globalstar cautioned that there is no guarantee of a settlement with Coface, and that the company is exploring other refinancing options as well.
Some $71.8 million in Globalstar notes paying interest of 5.75 percent per year were callable on April 1. The company said it had been informed that owners of more than 98 percent of notes intended to present them for payment on April 1.
Globalstar does not have the cash to pay these creditors and would have faced a default event on its Coface-backed facility if the note holders had not agreed to an extension.
Globalstar said that in return for the two-week extension on the part of these note holders, the company has agreed to pay legal costs associated with the transaction through April 1.
Globalstar operates a fleet of 24 new second-generation satellites in low Earth orbit, plus its older satellites. With the launch of the final six-satellite group of second-generation spacecraft in February, the company has been trying to rebuild its customer base for voice calls, the most profitable of its service offerings.
Voice services degraded starting in 2007 following failures on the first-generation Globalstar spacecraft, and the company has kept the business going by diversifying into data-related services including its popular SPOT Messenger service to the consumer market.
Globalstar had hoped to win Coface approval for additional financial backing in support of the construction and launch of six more second-generation satellites. But Globalstar Chief Executive Jay Monroe said recently that an upgraded Globalstar ground network would remove the need for these additional spacecraft.