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COVINGTON, La., April 1, 2013 (GLOBE NEWSWIRE) -- Globalstar, Inc. (OTCBB:GSAT) announced today that it has entered into a forbearance agreement with the holders of approximately 78% of its 5.75% Convertible Senior Notes due 2028 (Notes).
The forbearance agreement is intended to provide Globalstar a further opportunity to negotiate a restructuring of the Notes. Under the terms of the forbearance agreement, the holders of approximately 78% of the Notes have agreed to forbear from pursuing any remedies with respect to the collection of the Notes, including, without limitation, declaring an acceleration of the Notes, until 11:59 pm (EDT) on April 15, 2013. Globalstar and the holders of the Notes are actively negotiating the terms of a potential restructuring arrangement of the Notes with the objective of reaching agreement by the end of the forbearance period.
Jay Monroe, Globalstar's CEO, said, "The forbearance agreement demonstrates the Note holders' support for Globalstar and provides a runway for further discussions towards a mutually agreeable restructuring of the Notes."
As required by the indenture, Globalstar previously announced an offer to purchase all of the Notes at par on April 1, 2013, which offer terminated on March 29, 2013. Globalstar has been advised by the trustee for the Notes that holders representing $70,654,000 in principal amount of the Notes (98.4% of the outstanding Notes) have exercised their rights pursuant to this offer. Under the Indenture, Globalstar is required to deposit with the trustee by 11 A.M. on April 1, 2013 cash equal to the purchase price of $70,654,000 to effect the purchase of the Notes from the exercising holders. As previously disclosed, Globalstar currently does not have sufficient funds to pay this purchase price.
In addition, Globalstar has failed to make the required interest payment of $2,064,365 on the Notes for the six months ended March 31, 2013. Globalstar's failure to pay this interest by April 30, 2013 would also constitute an event of default under the Notes.