SAN JOSE, Calif.-Satellite phone service provider Globalstar Telecommunications Ltd. reported an agreement with New Valley Corp. to provide Globalstar with $55 million in debtor-in-possession financing as the first step toward assuming majority ownership of a reorganized Globalstar company.
Under terms of the purchase and reorganization plan, which is subject to approval by the U.S. Bankruptcy Court in Delaware, New Valley will assume majority ownership of Globalstar with the remainder of the equity to be held by the company’s creditors. Those creditors include Loral Space & Communications, Qualcomm Inc. and holders of Globalstar L.P. bonds. Creditors will also receive preferred shares in the new company along with warrants to buy additional equity.
Globalstar, which currently provides service to 83,000 subscribers and coverage in more than 100 countries, said the investment will allow it to accelerate its program of new product development and service offerings and will include particular emphasis on developing next-generation products for maritime, aviation and other specialized markets.
