MILPITAS, Calif., April 10, 2008 (PRIME NEWSWIRE) -- Globalstar, Inc. (Nasdaq:GSAT), a leading provider of mobile satellite voice and data services to businesses, governments, and individuals, today announced that it has priced its previously announced offering of $135 million of 5.75% Convertible Senior Notes due 2028 (the "Notes"). Globalstar also announced it has granted the underwriters of the Notes offering a 30-day option to purchase an additional $15 million aggregate principal amount of the Notes, solely to cover overallotments. Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and Deutsche Bank Securities Inc. are joint Book-Running Managers for the offering.
The Notes will be convertible into Globalstar common stock, cash, or a combination thereof, at Globalstar's option, at an initial base conversion rate of 166.1820 shares of Globalstar common stock per $1,000 principal amount of Notes, which is equivalent to an initial base conversion price of approximately $6.02 per share of Globalstar common stock and represents an approximately 45% premium to the price at which Globalstar's common stock was offered in the concurrent common stock offering described below. The base conversion rate and the base conversion price will be subject to adjustment in certain circumstances.
The Notes will bear interest at a rate of 5.75% per annum, payable on April 1 and October 1 of each year, beginning October 1, 2008. The Notes will mature on April 1, 2028 and may not be redeemed by Globalstar prior to April 1, 2013, after which they may be redeemed at 100% of the principal amount plus accrued and unpaid interest. Holders of the Notes may require Globalstar to repurchase the Notes on each of April 1, 2013, April 1, 2018 and April 1, 2023 or if Globalstar is involved in certain types of corporate transactions or other events constituting a fundamental change. The Notes will be general senior unsecured obligations of Globalstar.
Concurrently with the offering of the Notes, Globalstar has entered into a share lending agreement with an affiliate of Merrill Lynch (the "share borrower"), pursuant to which Globalstar will lend up to 36,144,570 shares of its common stock to the share borrower. Globalstar has also entered into an underwriting agreement with Merrill Lynch and the share borrower, pursuant to which the share borrower intends to sell the borrowed shares in an underwritten registered public offering and will use the short position resulting from the sale of such shares to facilitate the establishment of hedge positions by investors in the Notes. 21,936,020 of the loaned shares will be initially offered at $4.15 per share in a fixed price offering and the remaining shares will be subsequently offered and sold from time to time at prevailing market prices at the time of sale or at negotiated prices in transactions, including block sales, in the over-the-counter market, in negotiated transactions or otherwise. The share borrower will receive all of the proceeds from the sale of the borrowed shares. Globalstar will not receive any of the proceeds from such sales, but will receive a nominal lending fee from the share borrower. The delivery of common stock pursuant to the share lending agreement will be contingent upon the closing of the Notes offering, and the closing of the Notes offering will be contingent upon the delivery of common stock pursuant to the share lending agreement.
Closing of the Notes offering and the fixed price offering of common stock are expected to occur on April 15, 2008, subject to satisfaction of various customary closing conditions.
Globalstar intends to use the net proceeds from the Notes offering to acquire government securities in an amount sufficient to make the first six semiannual payments of interest on the Notes that will be pledged for the exclusive benefit of the holders of the Notes, to pay a portion of the costs of procuring and launching Globalstar's second-generation satellite and related ground facilities and for other general corporate purposes.
Globalstar has filed a registration statement with the SEC for the offerings of the Notes and the common stock to which this communication relates. Before investing, please read the prospectus and prospectus supplements for the Notes and the common stock offerings in the registration statement and other documents Globalstar has filed with the SEC for more complete information about Globalstar and these offerings. These documents are available for free and may be obtained by visiting the SEC website at http://www.sec.gov. Alternatively, copies of the prospectus and the prospectus supplements for the Notes and the common stock offerings are available by contacting Merrill Lynch & Co. at 4 World Financial Center, Attention: Prospectus Department, New York, New York 10080 and Deutsche Bank Securities Inc. at Deutsche Bank Securities Prospectus Department, 100 Plaza One, 2nd Floor, Jersey City, New Jersey 07311; telephone 800-503-4611; e-mail prospectus.cpdg@db.com.
This news release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sales of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such state or jurisdiction.
About Globalstar, Inc.
Globalstar offers satellite voice and data services to commercial and recreational users in more than 120 countries around the world. Globalstar products include mobile and fixed satellite telephones, simplex and duplex satellite data modems and flexible service packages. Many land based and maritime industries benefit from Globalstar with increased productivity from remote areas beyond cellular and landline service. Global customer segments include: oil and gas, government, mining, forestry, commercial fishing, utilities, military, transportation, heavy construction, emergency preparedness, and business continuity as well as individual recreational users. Globalstar data solutions are ideal for various asset and personal tracking, data monitoring and SCADA applications.
Safe Harbor Language for Globalstar Releases
This press release contains certain statements such as, "Globalstar intends to use the net proceeds from the Notes offering to acquire government securities in an amount sufficient to make the first six semiannual payments of interest on the Notes that will be pledged for the exclusive benefit of the holders of the Notes, to pay a portion of the costs of procuring and launching Globalstar's second-generation satellite and related ground facilities and for other general corporate purposes" that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond Globalstar's control, including demand for Globalstar's products and services; problems relating to the construction, launch or in-orbit performance of its existing and future satellites; problems relating to the ground-based facilities operated by it or by independent gateway operators; its ability to attract sufficient additional funding if needed to meet its future capital requirements; competition and its competitiveness vis-a-vis other providers of satellite and ground-based communications products and services; the pace and effects of industry consolidation; the continued availability of launch insurance on commercially reasonable terms, and the effects of any insurance exclusions; changes in technology; its ability to continue to attract and retain qualified personnel; worldwide economic, geopolitical and business conditions and risks associated with doing business on a global basis; and legal, regulatory, and tax developments, including changes in domestic and international government regulation.
Any forward-looking statements made in this press release speak as of the date made and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and Globalstar undertakes no obligation to update any such statements. Additional information on factors that could influence Globalstar's financial results is included in its filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.