LightSquared is hoping that the second time will be a charm as the bankrupt spectrum license holder and satellite communications provider has reportedly filed a second attempt to exit bankruptcy reorganization backed by a trio of investment firms.
Bloomberg reported that LightSquared has filed a new plan that will see it exit bankruptcy protection backed by up to $3.75 billion in investments from Fortress Investment Group, JPMorgan Chase and Melody Capital Advisors. LightSquared’s previous attempt to exit Chapter 11 bankruptcy protection failed earlier this month when Centerbridge Partners backed out of a previously announced $3.3 billion deal “for economic and non-economic reasons.”
The latest plan is dependent on LightSquared gaining access to its 1.6 GHz spectrum holdings from the Federal Communications Commission that have been tied up in controversy surrounding potential interference with some ground-based GPS systems. The FCC in early 2011 had initially granted LightSquared access to 40 megahertz of spectrum in that band adjacent to GPS operation, only to then revoke that access in early 2012 after acknowledging that interference with some GPS assets would be unavoidable. That interference is generated by some older GPS equipment lacking sufficient filters to prevent them from operating outside of their intended spectrum bands.
Failing to gain access to the spectrum holdings, LightSquared owner Harbinger Capital filed for bankruptcy protection noting the need noting to gain “breathing room” to work through regulatory challenges.
The new plan also allows LightSquared to avoid a financial commitment from Dish Network Chairman Charlie Ergen who has been angling to get a hold of LightSquared against the wishes of LightSquared’s management.
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