Globalstar Signs Contract With MDA for New Satellites
February 24 2022 - 8:30AM
Business Wire
Globalstar, Inc. (NYSE American: GSAT) today announced that the
Company has entered into a satellite procurement agreement (the
“Procurement Agreement”) with Macdonald, Dettwiler and Associates
Corporation (“MDA”) pursuant to which Globalstar will acquire 17
new satellites that will replenish and extend the life of
Globalstar’s existing constellation. Globalstar is acquiring the
satellites to provide continuous satellite services to the
potential customer under the Terms Agreement described in the
Company’s Annual Reports, as well as services to Globalstar’s
current and future customers. Rocket Lab USA, Inc. is the principal
satellite bus subcontractor under the Procurement Agreement.
As stated above, Globalstar is acquiring the new satellites to
provide satellite services to the potential customer under the
Terms Agreement, as well as services to Globalstar’s current and
future customers. Accordingly, as the potential customer has
approved the amounts related to the construction of the new
satellites, subject to certain conditions and limitations, the
potential customer will reimburse Globalstar for 95% of the
approved capital expenditures Globalstar makes in connection with
the new satellites, interest costs of the Company’s borrowings
related to the new satellites as well as termination costs, should
any arise. In addition, if it elects to obtain services from
Globalstar under the Terms Agreement, the potential customer is
obligated to make service payments and cost reimbursements to
Globalstar in amounts that would be material to the Company.
The total contract price for the initial 17 satellites is $327.0
million. Globalstar maintains the option to acquire up to nine
additional satellites with flexibility in timing to place such
order in addition to other optional services under the contract. If
Globalstar elects to acquire new satellites, each satellite will be
priced at $11.4 million, subject to certain price adjustments. The
Procurement Agreement requires the Contractor to deliver the
satellites by 2025, with an expectation that all satellites will be
launched by the end of 2025. Globalstar plans to contract
separately for launch services and launch insurance for the new
satellites.
David Kagan, Globalstar’s CEO stated, “After running a
competitive process with multiple bidders, we are very pleased to
announce the selection of MDA in partnership with Rocket Lab for
the construction of our new satellites. The combination of these
vendors offered us the best overall balance of innovation,
technical capability, schedule reliability and cost. These new
satellites will ensure Globalstar’s ability to provide the highest
quality mobile satellite services to its customer over the
long-term. We look forward to beginning the process of bending
metal and readying the new satellites for launch beginning in
approximately three years.”
The Procurement Agreement provides for deferrals of milestone
payments from February 2022 through August 2022, at a 0% interest
rate. On August 16, 2022, all deferred payments will become due by
which time Globalstar expects to complete a senior secured
financing. This financing is expected to provide sufficient
proceeds for the construction and launch of the new satellites, and
the Company expects to refinance its current senior credit facility
concurrent with or after the financing.
About Globalstar, Inc.
Globalstar pioneered personal safety by introducing its SPOT
Satellite GPS Messenger in 2007. Today, leveraging its low-earth
orbit (LEO) satellite constellation, Globalstar reliably connects
and protects assets, transmits key operational data, and saves
lives – from any location – for consumers, industrial companies and
government agencies in over 120 countries. With a portfolio that
includes SPOT GPS messengers, next-generation IoT products and
modules, and cloud-based telematics solutions, Globalstar’s cost
effective satellite-powered innovations give users visibility and
intelligence for improving safety and operational efficiencies.
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.
For more information, visit www.globalstar.com.
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 pursuit of terrestrial spectrum
authorities globally, future increases in our revenue and
profitability, the impact on our business due to unexpected events
such as the COVID-19 coronavirus, 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/20220224005356/en/
Denise Davila investorrelations@globalstar.com
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