Coface Supports Funding for Deployment of Second-Generation Constellation,
Launch of Next-Generation Network Services and Design of Satellite Interface
Chipsets for New Mobile Devices
MILPITAS, Calif., March 25, 2009 (GLOBE NEWSWIRE) -- Globalstar, Inc.
(Nasdaq:GSAT), a leading provider of mobile satellite voice and data services
to businesses, government and individuals, today announced that Coface has
agreed to provide a guaranty in support of a proposed $574 million credit
facility to be extended by a syndicate of banks to Globalstar as borrower.
Coface, the export credit agency acting on behalf of the French government, has
advised Globalstar that it intends to provide long-term credit insurance to
facilitate the proposed credit facility. Banks who have received initial credit
committee approvals in relation to the approximately 6.30 percent interest rate
credit facility include BNP Paribas, Natixis, and Societe Generale, which would
act as mandated lead arrangers (BNP Paribas is acting as Coface Agent). The
credit facility and receipt of funding by Globalstar is subject to closing
conditions and there can be no assurance at this time that any such closing
will actually occur.
The principal closing conditions include the conversion into equity at closing
of senior secured term and revolving credit loans to Globalstar from its
principal stockholder Thermo Funding Company LLC and the receipt by Globalstar
of additional equity and contingent equity in an amount of approximately $100
million, most of which is expected to be provided by Thermo Funding.
Globalstar intends to use the financing to solidify its long-term space system
by funding the manufacture and delivery of the Globalstar second-generation
satellites by Thales Alenia Space as well as the launch of those satellites by
launch services provider Arianespace. The financing would also be used to
facilitate certain long-lead items connected with the accelerated delivery of
the Company's second-generation satellites, the completion of Globalstar's
next-generation ground facilities and the design of Globalstar's
next-generation of satellite interface chipsets.
"Funding under the proposed credit facility will solidify our long-term
leadership position in the mobile satellite services industry," said Jay
Monroe, Chairman and CEO of Globalstar, Inc. Mr. Monroe added, "With just a few
months to go before we take delivery of the first of our second-generation
satellites, we continue to demonstrate the ability to accomplish exactly what
we set out to do with Thales when we contracted with them for our new
satellites in 2006. This proposed financing, during what can only be described
as extremely challenging times for the global credit markets, is a testament to
the potential of Globalstar and to the dedication and efforts of those at
Coface, BNP Paribas, Thales, Arianespace and Hughes who share our vision of the
company's future. We believe this will provide us with the resources needed to
deliver an industry leading, high quality mobile satellite service for the
foreseeable future."
Globalstar's second-generation satellite constellation has a 15-year design
life and is expected to secure Globalstar's space segment beyond 2025. The
proposed financing would pave the way for the delivery and launch of
second-generation satellites including the accelerated delivery of these
satellites. The launch and deployment of the second-generation satellite
constellation is scheduled to begin later this year.
The financing would also be used to facilitate the construction of the
Globalstar next-generation ground network and the design and delivery of
Globalstar's next-generation satellite interface chipsets. The ground network
upgrades will support the Company's new mobile satellite services which will
feature industry leading voice quality as well as increased data speeds to both
handheld and fixed subscriber equipment.
The new interface chipsets will be used to provide satellite capability to
various next-generation Globalstar handsets, fixed units and modem-equipped
transceivers and transmitters. These new Globalstar devices are expected to be
manufactured for a fraction of the cost of Company's current first and
second-generation handsets and data modems. Globalstar also expects to provide
inexpensive interface chips to various manufacturers of terrestrial wireless
handsets looking to affordably integrate Globalstar's embedded technology and
ubiquitous satellite coverage into their handheld devices. When compared to the
current costs of integration, the Company anticipates drastically reduced
interface chipset pricing and material costs for the production of these
next-generation multi-mode solutions.
About Globalstar, Inc.
With over 325,000 subscribers, Globalstar is a leading provider of mobile
satellite voice and data services. Globalstar offers these services to
commercial and recreational users in more than 120 countries around the world.
The Company's products include mobile and fixed satellite telephones, simplex
and duplex satellite data modems and integrated solutions such as the SPOT
Satellite GPS Messenger plus 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.
For more information regarding Globalstar, please visit Globalstar's web site
at www.globalstar.com
Safe Harbor Language for Globalstar Releases
This press release contains certain statements such as, "Globalstar intends to
use the proposed financing to solidify its long-term space system by funding
the manufacture and delivery of the Globalstar second-generation satellites by
Thales Alenia Space as well as the launch of those satellites by launch
services provider Arianespace," 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 our control, including demand for our products and
services, including commercial acceptance of our new Simplex products,
including our SPOT Satellite Messenger product, and the ability to retain and
migrate our two-way communications services subscribers to our
second-generation constellation when it is deployed; our ability to complete
the documentation of the proposed credit facility and to obtain additional
financing, including the additional equity financing which is a condition of
the proposed credit facility; problems relating to the construction, launch or
in-orbit performance of our existing and future satellites; including the
effects of the degrading ability of our first-generation satellite
constellation to support two-way communication; problems relating to the
ground-based facilities operated by us or by independent gateway operators; our
ability to attract sufficient additional funding to meet our future capital
requirements including deployment of our second-generation constellation;
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; our 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 we undertake no obligation to update any
such statements. Additional information on factors that could influence our
financial results is included in our filings with the Securities and Exchange
Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K.
CONTACT: Globalstar, Inc.
Dean Hirasawa
(408) 933-4006
Dean.hirasawa@globalstar.com
Globalstar Announces Coface Backing for Proposed Financing
| Source: Globalstar, Inc.