Company also announces $85 million financing and financial backstop from Thermo Receives necessary approval from Lenders and French government to implement Exchange and agreement on principal terms to amend COFACE Facility Agreement in near future COVINGTON, La., May 20, 2013 (GLOBE NEWSWIRE) -- Globalstar, Inc. (OTCBB:GSAT), a leading provider of mobile satellite voice and data services, announced today it has successfully completed and reached agreements to complete multi-part financings in connection with the successful exchange (the "Exchange") of its 5.75% Convertible Senior Unsecured Notes ("5.75% Notes") into new 8.00% Senior Unsecured Convertible Notes ("8.00% Notes"). In addition to the Exchange, Globalstar also entered into an agreement with Thermo and its French bank group providing $25 million of initial equity from Thermo to complete the Exchange. The agreement also establishes the principal terms of an amendment to the 2009 COFACE Facility Agreement that, among other adjustments, upon closing would materially improve the debt amortization and related financial covenant schedules and provides for an incremental $60 million of funding and funding backstop from Thermo, up to $20 million of which could be injected even prior to the anticipated closing on the facility amendment. Once implemented, these agreements eliminate financial uncertainties, materially reduce debt amortization requirements through 2019 and provide the capital required, which, when combined with anticipated internally generated cash flow and the $30 million Terrapin equity line announced in December 2012, are expected to facilitate a fully funded long-term business plan. Details of the agreements and financings include:
- The Exchange, with a 91% participation rate, provided for the exchange of $65.6 million of 5.75% Notes for $54.6 million of 8.00% Notes, plus cash and equity. The initial conversion price on the 8.00% Notes is $0.80, which price is subject to customary anti-dilution and other protections.
- An agreement with senior lenders and approval of the French government under the 2009 COFACE Facility Agreement to approve the Exchange. This agreement also sets forth the principal terms of a facility amendment that, when completed, will defer and reduce near term repayment obligations and reset all financial covenants, among other terms.
- The agreement also provided for Thermo's completion of an investment of $25 million of equity capital before the close of the Exchange, and sets the terms for an incremental backstop equal to $60 million of additional capital through 2014. Thermo invested $5 million of the $60 million, in addition to the $25 million required, in connection with the closing of today's transactions. The backstop will be reduced to the extent Globalstar raises capital from 3 rd party investors.