NEW YORK-Globalstar L.P. said it made an agreement that replaces a $250-million Chase credit facility and will leave the company at the end of the year with a surplus of about $90 million in cash plus revenues generated from operations at the end of the year.
The $250-million credit line has been replaced with pay-in-kind Globalstar notes due 2003. Globalstar entered into the initial credit facility agreement in 1996. The guarantors of the facility received warrants for Globalstar common stock in consideration of their guarantee. The guarantors have repaid the bank lenders all amounts under the credit facility.
Reports have circulated for months that Globalstar was slipping further into financial trouble. Globalstar late last month released a statement saying it had sufficient funds to continue selling satellite services, but would likely require additional funding in the fall.
