RESTON, Va., Oct. 19 /PRNewswire-FirstCall/ -- TerreStar
Corporation (Nasdaq: TSTR) ("TerreStar") announced today that its
majority-owned subsidiary TerreStar Networks Inc. and certain other
affiliates have filed voluntary petitions for reorganization under
chapter 11 of the U.S. Bankruptcy Code as part of a strategic plan
to strengthen their financial position and achieve long-term
success in the mobile satellite services market. Through the
restructuring, TerreStar Networks hopes to lessen its debt
obligations in order to place greater focus on delivering the
future of 'always available' mobile communications through its
recent launch of the world's first integrated satellite-cellular
smartphone.
Jeffrey W. Epstein, president and
chief executive officer, TerreStar, said, "After careful
consideration of all available alternatives, we determined filing
chapter 11 was a necessary and prudent step to strengthen our
balance sheet and gain financial flexibility in order to access
liquidity and position TerreStar Networks as a stronger, healthier
company."
Concurrently with its chapter 11 filing, TerreStar Networks has
entered into an agreement with EchoStar Corporation, its largest
secured creditor, to provide the Company with a $75 million debtor-in-possession financing
facility. TerreStar Networks will use the
debtor-in-possession financing to maintain business-as-usual
operations during the restructuring process. The Company believes
its current and anticipated cash resources will be suitable to pay
its expenses and maintain its business operations during chapter
11.
Epstein continued, "As part of this initiative, and as a result
of receiving our debtor-in-possession financing facility, we will
be able to conduct business-as-usual with customers and partners,
and ensure the highest customer service is provided throughout the
reorganization."
In addition to the debtor-in-possession financing facility,
TerreStar Networks has also entered into a Restructuring Support
Agreement with EchoStar Corporation, under which EchoStar has
agreed to support a restructuring premised on a debt for equity
conversion by the Debtors' secured noteholders, and backstop a
$100 million rights offering that
will provide the funding for TerreStar Networks' exit from chapter
11. TerreStar Networks believes that the Restructuring
Support Agreement will provide the foundation for an expeditious
emergence from chapter 11.
Epstein concluded: "The commitment EchoStar has made to support
our restructuring will allow us to maximize value for all of our
stakeholders and allow us to emerge from chapter 11 on an expedited
time frame."
For more information about the restructuring, please visit
TerreStar Networks' restructuring website at www.TerreStarInfo.com
or call the restructuring hotline at (866) 682-1770.
About TerreStar
TerreStar Corporation (NASDAQ: TSTR), through its majority-owned
subsidiary, TerreStar Networks (www.terrestar.com), is re-defining
mobile communications by extending the reach, reliability, and
resiliency of traditional mobile networks throughout the United States, U.S. Virgin Islands and Puerto Rico. Offering wholesale satellite
services via today's leading service providers, and the world's
first and only integrated satellite-cellular smartphone, the
GENUS™, TerreStar is transforming the mobile experience and
enabling users to be prepared and stay connected when they need to
most.
Statement under the Private Securities Litigation Reform
Act:
This press release may contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act,
with respect to the strategy of TerreStar Corporation, its plans,
and the transactions described in this press release. Such
statements generally include words such as could, can, anticipate,
believe, expect, seek, pursue, proposed, potential and similar
words and terms in connection with future results. We assume no
obligation to update or supplement such forward-looking
statements.
For more information, please
contact:
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Kelly Adams, Senior Director
Marketing and Communications
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TerreStar Networks
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Phone: +1
703-483-7966
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Email:
kelly.adams@terrestar.com
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Chris Fallon
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Ruder Finn for TerreStar
Networks
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Phone: +1
212-715-1691
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Email:
fallonc@ruderfinn.com
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SOURCE TerreStar Corporation
Copyright . 19 PR Newswire