At Funding, Credit Facility Will Complete An Approximately $738 Million
Financing for Globalstar 2.0 Second-Generation Satellite Constellation and
IP-Based Ground Segment
MILPITAS, Calif., June 5, 2009 (GLOBE NEWSWIRE) -- Globalstar, Inc.
(Nasdaq:GSAT), a leading provider of mobile satellite voice and data services
to businesses, government and individuals, today announced that it has signed
an agreement with a syndicate of banks for a $586 million credit facility to be
supported by credit insurance from Coface, the export credit agency acting on
behalf of the French government. The bank syndicate includes BNP Paribas,
Natixis, Societe Generale, Calyon, and Credit Industriel et Commercial (CIC),
each of which will act as Mandated Lead Arranger, and BNP Paribas acting as
Coface Agent. Coface will provide long-term credit insurance to facilitate the
credit facility. The credit facility will bear interest at a floating LIBOR
(London Inter-Bank Offer Rate), capped at 4 percent through 2012, and will be
due semi-annually. Calculated today, this interest rate would be 3.27 percent.
Scheduled semi-annual principal repayments will begin the earlier of eight
months after the launch of the second generation constellation or December 15,
2011. Brown Brothers Harriman acted as financial advisor to Globalstar in
connection with the transaction.
Completion of the credit facility and receipt of funding by Globalstar is
subject to a number of conditions precedent, which the Company expects will be
satisfied shortly. These conditions include the conversion into equity of
approximately $180 million of outstanding senior secured loans made to
Globalstar by its principal stockholder, Thermo Funding Company LLC. These
conditions also include the receipt by the Company of at least $45 million of
proceeds from the sale of equity or subordinated debt securities, the deposit
by Thermo Funding of $60 million into a contingent equity account available to
the Company to repay loans under the credit facility, and funding a $46.8
million debt service reserve account. Thermo Funding intends to convert the
outstanding senior secured loans into equity, to deposit $60 million into the
contingent equity account and to purchase up to $45 million of the securities
described above. Thermo Funding and other second-generation suppliers have
agreed in principle to fund the approximately $46.8 million debt service
reserve account. The terms of these arrangements have not been finalized.
The Company expects that this $738 million financing will fully fund the
manufacture, delivery and launch of the Company's Globalstar 2.0
second-generation network and ground facilities, plus certain long-lead items
connected with the accelerated delivery of additional second-generation spare
satellites and will provide the Company with working capital. Globalstar
expects to be the first global mobile satellite voice and data company to
deliver and deploy its second-generation satellites and the first to offer an
IP (Internet Protocol)-based network. The financing will also facilitate the
introduction of Globalstar's next-generation satellite interface chipsets being
designed by Hughes Network Systems. These network upgrades will support the
Company's new mobile satellite services which will feature industry leading
voice quality as well as increased data speeds to both handheld and fixed
subscriber equipment.
"The completion of this financing will solidify Globalstar's long-term
leadership position in the mobile satellite services industry by providing the
space, ground and terminal resources needed to deliver an industry leading,
high quality mobile satellite service well into the future," said Jay Monroe,
Chairman and CEO of Globalstar, Inc. Mr. Monroe added, "In a few months we
expect to be in the enviable position of taking possession of the first of our
Globalstar 2.0 next-generation satellites. With our next-generation space and
ground segment, we plan to be first to market with a host of new advanced
mobile satellite services years ahead of the competition. I would like to thank
all of those involved who worked tirelessly on these agreements and also
acknowledge the dedication and diligent efforts of those at Coface, BNP
Paribas, Natixis, Societe Generale, Calyon, CIC, Thales, Arianespace and Hughes
who share our vision of the Company's future."
The completion of the financing is critical for the design and deployment of
the Globalstar 2.0 next-generation network which is expected to provide high
quality voice and data services beyond 2025. Globalstar 2.0 includes the
second-generation satellite constellation, being designed and manufactured by
Thales Alenia Space, and the company's new ground segment being developed by
Hughes and Ericsson Federal. Globalstar 2.0 will support increased data speeds
of up to 256 kbps, in a flexible all IP (Internet Protocol) configuration.
Products and services supported are expected to include push to talk and
multicasting, advanced messaging capabilities such as multimedia messaging or
MMS, mobile video applications, geo-location services, multi-band and
multi-mode handsets and data devices with GPS integration.
Conference Call Note
Globalstar plans to hold an investor conference call upon the closing of the
credit facility described above. Globalstar will release dial-in information
and details once the call is scheduled.
About Globalstar, Inc.
With over 350,000 subscribers, Globalstar is a leading provider of mobile
satellite voice and data services. Globalstar offers these services to
commercial and recreational users in more than 120 countries around the world.
The Company's products include mobile and fixed satellite telephones, simplex
and duplex satellite data modems and integrated solutions such as the SPOT
Satellite GPS Messenger plus flexible service packages. Many land based and
maritime industries benefit from Globalstar with increased productivity from
remote areas beyond cellular and landline service. Global customer segments
include: oil and gas, government, mining, forestry, commercial fishing,
utilities, military, transportation, heavy construction, emergency
preparedness, and business continuity as well as individual recreational users.
Globalstar data solutions are ideal for various asset and personal tracking,
data monitoring and SCADA applications.
For more information regarding Globalstar, please visit Globalstar's web site
at www.globalstar.com
Forward-Looking Statements
This press release contains certain statements such as, "The network upgrades
will support the Company's new mobile satellite services which will feature
industry leading voice quality as well as increased data speeds to both
handheld and fixed subscriber equipment," that are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond our control, including our ability to
complete the remaining documentation and satisfy the closing conditions of the
credit facility, including obtaining the required additional equity financing;
demand for our products and services, including commercial acceptance of our
new Simplex products and our SPOT Satellite GPS Messenger product; our ability
to retain and migrate our two-way communications services subscribers to our
second-generation constellation when it is deployed; problems relating to the
construction, launch or in-orbit performance of our existing and future
satellites; the effects of the degrading ability of our first-generation
satellite constellation to support two-way communication; problems relating to
the ground-based facilities operated by us or by independent gateway operators;
our ability to attract sufficient additional funding to meet our future capital
requirements; competition and its competitiveness vis-a-vis other providers of
satellite and ground-based communications products and services; the pace and
effects of industry consolidation; the continued availability of launch
insurance on commercially reasonable terms, and the effects of any insurance
exclusions; changes in technology; our ability to continue to attract and
retain qualified personnel; worldwide economic, geopolitical and business
conditions and risks associated with doing business on a global basis; and
legal, regulatory, and tax developments, including changes in domestic and
international government regulation.
Any forward-looking statements made in this press release speak as of the date
made and are not guarantees of future performance. Actual results or
developments may differ materially from the expectations expressed or implied
in the forward-looking statements, and we undertake no obligation to update any
such statements. Additional information on factors that could influence our
financial results is included in our filings with the Securities and Exchange
Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K.
CONTACT: Globalstar, Inc.
Media:
Dean Hirasawa
(408) 933-4006
Dean.hirasawa@globalstar.com
Skyya Communications
Media:
Susan Donahue
(646) 454-9378
Susan.donahue@skyya.com
Globalstar Announces Execution of Coface-Backed Financing
| Source: Globalstar, Inc.