Globalstar Announces Decision to Proceed With the French BPIFAE Facility Amendment and New Second Lien Facility
September 05 2019 - 4:05PM
Business Wire
- Amendment maintains current cost of senior debt and provides
runway through 2022 senior debt maturity
- $195 million new second lien credit facility to be funded by a
strategic partner, Thermo and other investors to pay down existing
debt
- Existing Thermo subordinated loan to be voluntarily converted
at $0.69 per share
- Total net senior debt at closing of less than $150 million
Globalstar, Inc. (NYSE American: GSAT) today announced that, in
consultation with the Strategic Review Committee of its Board of
Directors and the Company’s financial advisors, it has decided to
proceed with an amendment to the current BPIFAE Facility Agreement
together with a capital raise of a new second lien credit facility.
Of the two financing options disclosed in the press release on
August 9, 2019, the amendment was determined to be the optimal
path.
In June, the Company reached an agreement in principle on the
terms of the pending amendment with the BPIFAE lenders and the
requisite credit committee approvals have since been received.
Additionally, the material terms of the second lien facility have
been agreed. Closing of these transactions is subject to final
definitive documentation and customary closing requirements and
conditions. The amendment provides for (i) prepayment of the next
three scheduled principal payments primarily using proceeds from
the new second lien term loan facility, (ii) revisions to the
remaining repayment schedule to reduce the amount of scheduled
payments of principal required prior to maturity, and (iii) a reset
of financial covenant levels together with an extension of the
availability of the cure mechanism under the BPIFAE Facility.
The amendment is intended to improve the Company’s capital
structure by fully funding the business plan through the final
maturity date of the BPIFAE Facility Agreement in December 2022. In
addition to providing a fully funded business plan, the amendment
will allow the Company to leave in place its current cost of
capital at favorable rates, reduce future amortization requirements
and secure a strategic partner to provide approximately one half of
the second lien facility. This partner brings significant
experience to the relationship as well as collaboration
opportunities with respect to various satellite and spectrum
initiatives.
To support the transaction, Thermo has agreed to a voluntary
conversion of the existing $127.1 million Thermo Subordinated Loan
Facility at the stipulated conversion price of $0.69 per share.
The terms and economics of the second lien term loan facility
are expected to be in line with the $62.0 million June bridge
facility except the payable-in-kind interest shall not exceed 14%
as compared to 15% in the bridge facility. The bridge facility will
be repaid in full with proceeds from the second lien facility. The
Company is expected to close the amendment and the second lien
facility in the next 30-45 days.
Dave Kagan, Globalstar’s Chief Executive Officer, commented, "We
are very excited to share this news with our investor base and
partners. We have a long history with our French lenders and
appreciate their partnership as we have worked to enhance the
Company’s liquidity profile. The deal will fortify Globalstar’s
balance sheet, bring a strong strategic partner into our capital
structure, and provide us with the runway to support ongoing
satellite and spectrum initiatives."
About Globalstar Globalstar is a leading provider of
customizable Satellite IoT Solutions for customers around the world
in industries such as oil and gas, transportation, emergency
management, government, maritime and outdoor recreation. A pioneer
of mobile satellite voice and data services, Globalstar allows
businesses to streamline operations by connecting people to their
devices, supplying personal safety and communication, and
automating data to more easily monitor and manage mobile assets via
the Globalstar Satellite Network. The Company's Commercial IoT
product portfolio includes the industry-acclaimed SmartOne asset
tracking products, Simplex satellite transmitters and the SPOT®
product line of personal safety, asset and communication devices,
all supported on SPOT My Globalstar, a robust cloud-based back
office solution. Completing the satellite product suite are Duplex
satellite data modems, the innovative Sat-Fi2® satellite Wi-Fi
hotspot, with all product solutions offering a variety of data
service plans. Learn more at Globalstar.com.
Note that all SPOT products described in this press release are
the products of SPOT LLC, a subsidiary of Globalstar, which is not
affiliated in any manner with Spot Image of Toulouse, France or
Spot Image Corporation of Chantilly, Virginia.
Safe Harbor Language for Globalstar Releases This press release
contains certain statements that are “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements are based on current
expectations and assumptions that are subject to risks and
uncertainties which may cause actual results to differ materially
from the forward-looking statements. Forward-looking statements,
such as the statements regarding our expectations with respect to
an amended BPIFAE Facility and a new second lien facility,
including the terms and timing thereof, the effect of those
transactions on our future business and cash needs, and other
statements contained in this release regarding matters that are not
historical facts, involve predictions. Any forward-looking
statements made in this press release are believed to be accurate
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20190905005968/en/
Marcy Fluitt, 985-335-1525 investorrelations@globalstar.com
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