MILPITAS, Calif., April 1, 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 intends to offer, subject to market conditions, $135 million of Convertible Senior Notes due 2028 (the "Notes"). Globalstar intends to grant 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, if any. Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and Deutsche Bank Securities Inc. will act as joint Book-Running Managers for this offering.
The Notes will be convertible into Globalstar common stock, cash, or a combination thereof, at Globalstar's option. The interest rate, conversion rate, conversion price and other terms of the Notes will be determined at the time of pricing of the offering. Holders of the Notes may require Globalstar to repurchase the Notes 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 intends to enter into a share lending agreement with an affiliate of Merrill Lynch (the "share borrower"), pursuant to which Globalstar will lend shares of its common stock to the share borrower. Globalstar also intends to enter 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. Globalstar expects that approximately 15,000,000 to 20,000,000 of the loaned shares will be initially offered 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.
Globalstar intends to use the net proceeds from the Notes offering to acquire government securities in an amount equal to the first six semiannual payments of interest on the Notes that will be pledged for the exclusive benefit of the holders of the Notes and 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 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. The Company's 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 equal to the first six semiannual payments of interest on the Notes that will be pledged for the exclusive benefit of the holders of the Notes and 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.