NEW YORK-Comsat Corp. signed a stock-purchase agreement valued at $116.5 million to sell most of Comsat RSI Inc. to a subsidiary of TBG Industries Inc., a New York-based private holding company.
Comsat RSI, which was placed in discontinued operations last June, designs, manufactures and integrates earth stations as well as wireless and advanced antenna systems. TBG was “looking at the worldwide telecom market” and thought the chance to purchase CRSI was a “great opportunity to get into that product line,” said Jack Haegele, TBG chairman and chief executive officer.
The financial impact of the transaction was included in Comsat’s 1997 loss from discontinued operations.
The sale price is subject to adjustment based on intercompany loans and advances between Comsat and Comsat RSI at the time of closing. Comsat plans to use proceeds from the sale to repay short-term debt.
“Completion of this sale, along with last year’s spin-off of Ascent Entertainment Group Inc., leads us forward as a smaller, healthier, more strategically focused company with a stronger balance sheet and significantly less short-term debt,” said Betty C. Alewine, president and chief executive officer of Comsat.
The company is selling its non-core businesses in an effort to focus its resources on “three key shareholder value drivers already underway,” said Alewine.
First, Comsat hopes to achieve satellite asset valuation through privatizing Intelsat and Inmarsat. The company also would like to be reclassified to non-dominant carrier status to obtain regulatory relief. Lastly, Comsat is aiming for “pro-competitive reform of the Communications Satellite Act,” Alewine explained.
