Globalstar Executes Refinancing With French Lender Consortium and New Second Lien Credit Facility
November 26 2019 - 7:56PM
Business Wire
Globalstar, Inc. (NYSE American: GSAT) announced today that it
has successfully refinanced its capital structure by executing an
amendment of its existing senior secured credit facility ("Senior
Facility”) and raising a new six-year second lien term loan
facility (“Second Lien Facility”) led by Thermo, the controlling
shareholder in Globalstar, and EchoStar Corporation, a premier
global provider of satellite communication solutions.
The proceeds from the $199 million Second Lien Facility, which
matures in November 2025, will be used towards the prepayment of
scheduled Senior Facility principal payments in the amount of $152
million as well as to pay off the $66 million bridge facility
raised in June 2019. The loans under the Second Lien Facility bear
payment-in-kind interest at a blended annual rate of 13.5%, and the
Second Lien Facility lenders received warrants to purchase 7% of
the Company’s outstanding shares on a fully diluted basis. The
amended terms of the Senior Facility include primarily (i)
revisions to the remaining repayment schedule to reduce the amount
of principal payments required prior to maturity from $300 million
to $85 million, leaving a final principal balance of approximately
$59 million (net of the debt service reserve account) due on
December 31, 2022, and (ii) a reset of financial covenant levels
together with an extension of our ability to make equity cures
through maturity. In connection with this refinancing, Thermo
agreed to voluntarily convert its 2009 subordinated loan to equity
at $0.69 per share in early 2020.
Jay Monroe, Executive Chairman of Globalstar, said, “This is a
great day for Globalstar, all of our shareholders, and existing and
new lenders. The transaction significantly improves our balance
sheet, provides us with runway, keeps the favorable pricing of our
existing credit facility in place and enhances our relationship
with EchoStar, one of the most respected satellite and
telecommunications companies in the world. We spent a considerable
amount of time this year selecting the solution that we believe is
best for the Company and our shareholders and are thankful to all
participating parties who worked together to complete this
financing.”
Mike Dugan, CEO and President of EchoStar, said, “We believe
Globalstar’s refinancing and the Second Lien Facility positions the
Company to realize the upside from their collection of spectrum and
satellite assets. With Globalstar, we see a satellite business that
should experience renewed growth in a connected IoT world combined
with a worldwide multi-band spectrum position. EchoStar continues
to invest in S-band spectrum assets across the globe and we see
potential opportunities to collaborate with Globalstar in S-band
development.”
Pradman Kaul, President of Hughes Network Systems, LLC, added,
“Globalstar and EchoStar, through its Hughes business, have worked
together for more than a dozen years. Hughes designed and developed
the second-generation ground network system for Globalstar and we
look forward to exploring ways we can work together to continue
meeting the growing demands for connectivity across all of our
market segments.”
The Company will conduct an investor conference call on Monday,
December 2, 2019 at 8:30 a.m. ET to discuss this refinancing.
Conference Call Details
Conference Call:
8:30 a.m. ET
Investors and the media are encouraged to
listen to the call through the Investor Relations section of the
Company's website at www.globalstar.com/corporate. If you would
like to participate in the live question and answer session
following the Company's conference call, please dial 1 (888)
771-4371 (US and Canada), 1 (847) 585-4405 (International) and use
the participant pass code 49233124.
Audio Replay:
A replay of the conference call will be
available for a limited time and can be heard after 11:00 a.m. ET
on December 2, 2019. Dial: 1 (888) 843-7419 (US and Canada), 1
(630) 652-3042 (International) and pass code 4923 3124#.
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 and the
Sat-Fi2® Remote Antenna Station, 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, 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
the close of a financing arrangement, the pursuit of terrestrial
spectrum authorities globally, future increases in our revenue and
profitability 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/20191126005925/en/
Marcy Fluitt investorrelations@globalstar.com
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